With online sales accounting for less than one per cent of the total sales in the country, it is a business that will grow in India and will continue to attract foreign capital
By Supriya Batra
An iPhone 5S just for ₹ 24,999,” Mrs Sharma’s eyes sparkle as she hits the ‘pay’ button while Mr Sharma’s face glows with happiness as he scrolls down his mobile screen exploring the discounted rates on LED televisions. Gone are the days when lighting some diyas, bursting crackers, exchanging sweets and spending time with family were the only things associated with Diwali, Christmas or ringing in the New Year. The festive season in India, over time, has become synonymous with shopping. It’s that part of the year when discounts and schemes flood the market. From white-washing the house to buying new clothes, cars, jewellery or gadgets, everything is scheduled around this time of the year. And India has taken to the online shopping experience like a fish would to water.
Limited holidays and long working hours for people in the service sector have provided a platform for the e-commerce portals to grow massively in India. Indians these days are confidently whipping out their credit cards and assertively entering their CVV numbers and IPINS to fill up their shopping carts. Overshadowing the brick and mortar retailing, online shopping transports one to a world where the click of a mouse or the touch of a finger allows you to experience a consumerist heaven filled with variety, convenience, discounts and desire while sitting in the comfort of one’s bedroom, office, car or a coffee shop. This festive season, the nation witnessed its biggest ever e-commerce battle between the titans of this sector – Flipkart, Amazon and Snapdeal. Though these were seen as the major players in the market; e-bay, Naaptol, indiatimeshopping, Jabong, Myntra, Lenskart, Limeroad and others were also not far behind. The month of October was full of marketing strategies to boost sales and gain maximum profits in the online retail sector. It started with the Bansal boys’ Flipkart announcing its ‘Big Billion Sale’ on October 6 followed by Amazon’s ‘Mission to Mars’ weekend and a seven-day Diwali Dhamaka sale beginning on October 10. The third major player Snapdeal too responded to these two with their campaign “For others it’s a big day. For us, today is no different”.
On their sales in the Diwali month, Mukesh Bansal of Flipkart told WCRC Leaders Asia, “A very large number of customers have come online. This has been a record month for us with the highest sales ever”. The top categories that were sold during the festive season included consumer electronics, smartphones, cameras, books, clothes and decorative items, etc. IT professional Anupriya Mehta, a self-confessed online shopaholic says, “Earlier, with my odd working hours, visiting stores got real difficult. Last year, I realised the importance and joys of online shopping. Now, I can shop anytime, anywhere. All I need is my smartphone and I can even shop while on my way to work. There is an availability of various options to pay as well: in EMIs, cash on delivery and there are money-back guarantees. It works perfectly for me.” E-commerce is in its nascent stage in India, accounting for less than one per cent of total retail sales. But since the base is small, the growth has been rapid. Finance from overseas is also pouring into the sector rapidly. Amit Agarwal, country manager and vice-president, Amazon India, says, “The response has been beyond our wildest expectations. Over 50 per cent orders came from nonmetros, our ₹10 crore-plus monthly sales club saw a growth of over five times and traffic spikes were witnessed on multiple occasions throughout October. Mobile applications further helped in raising the traffic peak by over 150 per cent on October 21, 2014”.
Spiralling inflation and economic slowdown have failed to deter shoppers who are not just visiting the retail shops but also are increasingly prefering to buy stuff online. Shopkeepers and mall owners are feeling the heat as they scramble to stand up to increasing competition from online retailers. A.K. Mahajan, owner of a glitzy branded clothes and apparels store in central Delhi says, “Many websites today offer huge discounts on products. Online stores do not have any overhead costs unlike us. We have to rent store space, hire manpower and pay for electricity. So it gets difficult to offer discounts to customers but to sustain in the present scenario, it has become necessary to bring out innovative schemes to lure customers to the store.”
A recent Associated Chambers of Commerce and Industry of India (ASSOCHAM) paper says that regular trade (when people buy goods from shops) increased by 65 per cent but online trade registered an impressive growth of 85 per cent, a good 20 per cent more. Shoppers have taken to online shopping in a big way, mostly because of the lucrative discounts offered by the e-commerce firms.
For instance, on the ‘Big Billion Day’, Flipkart offered ₹8,000 off for a Moto X in exchange for an old phone and an additional 10 per cent for select credit cards. As a Dhanteras offer, Amazon offered 70 per cent off on jewellery, 30 to 50 per cent off on mobile phones, 30 per cent off on TVs and home theatres and 19 per cent off on an HP laptop. A Dell laptop worth ₹41,592 was on sale for ₹29, 990. Jabong lured shoppers to download its mobile application to get an extra 30 per cent off on all men’s and women’s apparels.
Although most of the discounts offered during this time were genuine but there were a few instances where Flipkart allegedly marked up the retail prices of some products and then highlighted “discounts” that brought the selling prices close to market rates. For instance, a MacBook Air 13 was priced at ₹56,490 on Flipkart but Snapdeal sold it for ₹49,999 on the same day. A regular buyer at e-commerce portals, Darpan Mago says, “My experience of buying on the Internet has been average. There aren’t much questions asked when it comes to replacements but a lot of time is consumed in arranging one. I believe online shopping is only fit for low cost consumables. The mechanism is yet to evolve in India.”
As October celebrations drew to an end, there were mixed responses on the online shopping experience. Software professional Ranit Biswas, working in Bangalore, says, “Although I am not an early morning person, I somehow managed to get up early on the so-called ‘Big Billion sale’ day. My friends were just being insane and so were a majority of people. Cracking a deal was the result of sheer luck and perseverance and I’m glad that I could avail some amazing discounts on mobile phones and accessories.”
“I rely on online shopping when it comes to books and small electronics, especially Flipkart and HomeShop18. I shopped for a shoe in the big billion sale but faced size issues when the product was delivered. I thought returning it would be a time consuming proposition but I had my money back in two days,” shares Avantika Gupta, a resident of west Delhi on her experience of the Big Billion Sale. Rajiv Singh, working in Noida, says, “My online shopping experience has been rewarding. I bought an expensive mobile phone from Snapdeal and got amazing discounts. The product quality is also no different from the ones you get in a physical shop. It is so much better than standing in long billing queues.”
While e-tailing has been particularly successful in metro cities, the craze for online shopping can also be experienced in the Tier 2 and 3 towns as it gives people access to products which are not available in physical stores there. Divya Sharma, a resident of Amritsar, says, “We don’t get many branded products in small cities such as Amritsar or Jalandhar but online shopping brings these things to my door in no time. Everything is on display to choose from and it saves so much time.” Anadi Goel, an MBA student from Meerut who bought a DSLR camera in the Big Billion sale, says, “Initially, I was not thinking about buying a camera online, but after the announcement of the Big Billion sale, I couldn’t resist the discounts offered and I’m glad I bought it. I’m looking forward to another Big Billion Day sale!”
The Indian consumer is a traditional buyer and there are a fair number of people who like to shop from the brick and mortar shops, where they can touch and feel the products. With complexities of the cash-on-delivery model,
replacement delays and the limited reach of the English-centric Internet, online shopping has a long way to catch up in India. But the up-swing is likely to last.