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India: GO MOBILE OR GO HOME

M-Commerce Is On The Rise

Taj Mahal India Ganj

 

India! The sacred land of the Gods. It boils with warmth, colors and chaos. The river Ganj flows through its cities bringing life and harmony to every living creature. The people are filled with energy and music. The home of Bollywood, Mahatma GandhiKrishna and Patchouli. The mesmerizing culture of India is not the only thing that will shake the world. India has a great potential also a great e-commerce market. Continue being fascinated!

Colorful Indian People Festival

Welcome To The Colorful World of India!

India is the second country with the highest population after China with 1.2 billion people. This crowded country has an economy of 5.43 trillion dollar and has a growth of 4.7 percent in the GDP. India’s population is a young population with the 65.8 percent age group of 15 – 65 years. Also the Indians are one of the most active countries when it comes to social media usage. The economy of India is flourishing every year and also its e-commerce market. The latest trends foreseen for the e-commerce market are:

  • Online grocery will be one of the hottest categories in 2015 since the trust of consumers have increased about online shopping,
  • Mobile shopping will be a key factor for the e-commerce market growth,
  • India Post will gain a better market share through its power in logistics,
  • Small scale retailers will find it hard to keep their place in the e-commerce market with the competition from Amazon, Alibaba, Snapdeal and Flipkart. The game has become the survival of the fittest but also the richest.

In 2015 a government regulation for the e-commerce market and consumer law is expected. With the unhappy customers who can suffer from bad consumer experiences, the government had decided to work on these issues to protect the consumers’ rights.

Let’s See Some Numbers

Indian People Computers

It seems like the year 2015 will be a fierce year for competition. It is important to be prepared for these changes and also improve the customer services. But before going to the improvements let’s start with some numbers:

  • Internet Users: 568 million
  • Penetration Rate and Rank: 12.6 % and 164th
  • E-commerce Market Size: 16.32 billion Dollars
  • E-commerce Growth: 27 %
  • Number of Digital Buyers: 30 million
  • Average Spending: 691 Dollars

graph mobile phone

Through this information, it is possible to deduce the mobile devices’ importance in online shopping and engagement. Only in the year 2014, 95 phone brands had launched 1137 new phone models into the market. People’s integration with new technologies will definitely grow more and more everyday and the outcomes will affect the e-commerce market highly. This can be interpreted as a big chance for the e-commerce market.

Mobile Is The Future

India has very exciting numbers, when it comes to the mobile market.

  • There are 59 million mobile subscribers, and with the affordable smartphone prices, the number seems to be going even higher.
  • Considering the present number of mobile users, the global rank of India is 7.
  • Mobile penetration rate is 4.9%
  • Mobile penetration rank 110 worldwide

In the Indian e-commerce market, 50% of the total online orders are coming from mobile devices. The leading online retailers of India such as Myntra, Flipkart and Snapdeal are expecting the rates of mobile orders to increase and, planning to improve their mobile services. The growth is not from the urban areas as expected but the Tier 2 and Tier 3 cities. Mobile is the only connected device for many consumers in Tier 2 and 3 cities and, rural areas since India’s infrastructure do not support laptops very well.

Pie Chart Indian E-commerce

The main reasons of the growth in Tier 2 and 3 cities can be shown as below:

  • India’s infrastructure is not capable to serve many laptops but it can serve to mobile phones very well.
  • Smartphones are very affordable even to the low-income groups and, it is used as an internet device.
  • Through online orders people in the Tier 2 and Tier 3 cities can access their bigger brands which are not available in Tier 2 and 3 cities.
  • Payment options such as cash-on-delivery were very beneficial since credit cards are not really common in India. Through this option the consumer spectrum has broaded into the rural areas.

With the high participation to the mobile shopping, companies are left with no choice but to embrace the mobile improvements. But the important part of serving mobile, is to maintain a high quality service. According to the studies, the mobile users in India have high standards when it comes to mobile speed and options. They are very demanding and impatient. The consumers do not return to shop from an online retailer if they have a bad shopping experience. Their criteria are strict and statistically, the Indian consumers do not wait more than 4 seconds for a page to load and, the conversion rates go down every second of delay by 7 percent.

In order to avoid customer losses through mobile devices, it is crucial that the companies take these ideas into consideration:

  • The mobile applications should load rapidly.
  • Every step of the shopping experience should be transformed into the mobile application. The process should be aiming to create the same shopping experience. Missing steps can cause a loss of customers.
  • The mobile apps should be integrated with the features of the smartphones. Through these integrations with cameras, QRcodes and GPS, the customer experiences could be enhanced. The features could contain GPS related store finders, advertisements with QRcodes or social media engagements through Pinterest or Instagram.
  • Through mobile usage the customer could be notified with the latest discounts, also emails could be a tool for product recommendations. Retailers can manage to track down the mobile users’ data, behavior on the app also.

India Agra Fort

Last Words

India is the 2nd most crowded country in the world. If this crowd can be managed in the right way to give them the best shopping experience, then the possibilities are many. It is important to notice the upcoming trends and act before they emerge. The mobile market for e-commerce is definitely a key factor to gain the upper hand. The rest is up to the online retailers and their actions. Competition is fierce and speed is important.

Nil Erden – Marketing Executive – nil@prisync.com – Prisync.com

We, as Prisync team, will be covering e-commerce markets of different countries from all around the world and will focus on the insights that are specific to each respective market.

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