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Ecommerce in India Post Pandemic: Consumer Behaviour & Trends of 2022 (and Beyond…)
Ecommerce in India Post Pandemic: Consumer Behaviour & Trends of 2022 (and Beyond…)

May 18, 2022

1984

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The constant upsurge of smartphone users in India (750 million in 2021) and the availability of the cheapest data service (1GB costing just Rs 18.5 (USD 0.26) as compared to the global average of about Rs 600 ) have completely transformed the shopping experience of Indians. This, and the impact of Covid-19 have flared up the e-commerce industry.

Although E-commerce has seen massive success, alongside providing social and economic benefits in developed countries, in developing countries like India it is still a niche sector because of many factors like infrastructure, government rules and regulations, consumers (especially in non-metro cities where life is not so fast) and considering elderly people as a special category largely preferring physical shopping to online.

Additionally,  many are not aware of the various steps and processes involved in online shopping. Therefore, what if  fear factors like ‘what if something goes wrong, a defective/wrong product is sent, the product doesn’t reach at all’  among many others, stop many buyers from going online.

COVID-19 however has disrupted everything including consumer behaviour. Because of the pandemic, during the lockdown periods, consumers refrained from physical shopping and turned online.

Unavailability of various products in physical stores also was another compulsion coupled with big queues, very limited time to do the shopping, and lack of available product options in stores.

No wonder then, companies like Metro Cash, Spencer’s retail, Flipkart, Amazon, Alibaba, Myntra and others saw a huge increase in sales. Many small and smart brick and mortar businesses quickly turned their sails by piggybacking with big brothers like Amazon, Flipkart and others to sell their goods.

As per The Economic Times, Jul 30, 2020 edition, Metro cities like Delhi, Mumbai and Bangalore saw a surge in online spending of about 135%, 133%, and 12% respectively during the lockdown in e-commerce spending.

The scenario prior to this was totally different. People mostly used to purchase products that generally were not available in physical stores or were available at MRP while the online platforms offered a good discount. Another reason was the bonanza sales of festive seasons like Diwali, Raksha, Holi, Navratri, and Independence Day celebrations.

But the e-commerce platform has seen a pandemic increase from 3% to 5% thanks to Covid19. In fact, Goldman Sachs reports India’s e-commerce penetration to more than double to 11% by 2024.

IBEF observes that there has been a steady growth in the popularity of e-commerce from 120 million users in 2018 to reach 220 million users by 2025. Retail e-commerce sales are expected to reach $32.7 billion this year (a rise of 31%) due to the popularity of the leading e-commerce platforms in India like Flipkart, Amazon, and Paytm Mall which are now expanding into new sectors as well including grocery.

Cheap internet connectivity, India’s growing young population which is gadget-savvy and the availability of low-cost smartphones are fuelling the rise.

Apart from this, the elderly generation who prior to Covid, were not very comfortable with online shopping, are aware of the nuances of online shopping these days and are more comfortable. They  realise the advantages and the conveniences of online purchases.

E-commerce future from 2022 onwards

E-commerce is therefore here to stay and stretch maybe into other conceivable and inconceivable areas. World Bank blog while narrating the future trends of online shopping, mentions that by 2024, it will be responsible for nearly 22% of all retail purchases around the world.

Some interesting explorations are as follows :

1. All businesses including e-commerce will continue using the power of social media lavishly as it has been a trend observed for the past 3 years where their social media ad spends have jumped to 70% almost.

2. In South Asia including India, the growing trend of e-commerce by small or medium firms to sell their products may result in its becoming the centre of the services-led growth prospects which has already started its journey during the crisis of Covid-19 .

Factors influencing online-shopping

Nevertheless, the path to heaven is never smooth. Some crucial determinants to the success could be:

1. Offers and discounts give a positive impact on the minds of customers.

2. Reviews, product ratings and seller ratings do influence product selection/rejection and taking a final call. Nearly 71% to 85% of the shoppers, as per a recent survey, mentioned these are crucial to their making decisions.

3. Privacy concerns like sharing personal information, and security have a negative impact on purchasing online that can play a decisive role in the final purchase.

4. Unstable or fluctuating internet connectivity, especially the customers using mobile data instead of Wi-Fi  broadband often discourages online shopping. Because, it leads to issues like payment held up, payment failure, double payment and time taken to get the money back to the bank account which are extremely concerning aspects the shoppers worry about. Even their shopping experiences get negatively impacted resulting in refraining from online shopping in future.

E-commerce is no doubt the latest revolutionary phenomenon defining the way of doing business. It is going to grow at an exponential rate and therefore it is imperative to understand (and consider as well) the various parameters that influence the sector as a whole.

 


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Dr. Vikram Kumar

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