The growing penetration of low-cost smartphones and faster Internet connectivity has led to a lot of first-time Internet users accessing the web through mobile. The number of people online in India is forecast to touch 302 million by the end of this year, overtaking the US as the second-largest Internet market in the world, according to a report by the Internet and Mobile Association of India (IAMAI) and IMRB International.
Some of the key findings of the study are:
1. Continuous online connectivity is becoming a reality in India
The continuous online connectivity is becoming a phenomenon in India with 53 per cent of respondents in the country saying that they are connected to the Internet every waking hour or more than 10 times a day.
This is higher than the global average of 51 per cent and even greater than China and Japan — where just 36 per cent and 39 per cent of respondents were online every hour respectively. These consumers tend to be younger and married, with higher representation of males.
2. Interpersonal connection, self-expression drive the consumers online
Interpersonal connection — Ninety four per cent of respondents said that connecting with other people is a key motivation for going online. This factor is the highest among Indian consumers. Globally, 74 per cent participants cited this as a key factor, while 88 per cent in China did so.
Self-expression — Sharing opinions with others through the Internet is particularly strong in emerging markets and places where offline self-expression is limited. In India, 88 per cent of respondents cited this as a factor. It’s a big motivator in China as well with 89 per cent citing it as a reason to be connected, compared to the global average of 62 per cent.
Access services / products and make purchases — On this front, Indian consumers are following the global trend; 92 per cent of the respondents said they go online to access services or for shopping, a number similar to the global average. Chinese consumers are leading the front on this, with 98 per cent of the respondents citing this as a key motivation.
Hana Ben-Shabat, AT Kearney Partner and Co-author of the study said, “The need for connection, self-expression, exploration, and convenience has changed the roles that brands and retailers play. To be successful, brands and retailers must address these needs by building communities, entertaining, and educating consumers and maintaining an ongoing dialogue.”
3. Social networks play a key role in determining consumption behaviour
The results of the study also highlighted that continuous connectivity is having a big impact on online retail in the country, with social networks becoming a major influencing factor. About 97 per cent of the respondents from India said they have a Facebook account, with 77 per cent saying they logged in to the social network daily. Indian connected consumers display high engagement on Facebook, but much lower on all other networks.
The study also showed that there is a huge link between continuous connectivity and consumption. Social networks are playing a key role in determining consumption behaviour of the connected consumers in India. More than 82 per cent of the respondents between the age of 16 and 35 said happenings on their social networks influence their purchasing decision. This compares to a global average of around 65 per cent.
In China, more than 95 per cent of respondents between the age of 16 and 45 said the chatter on their social networks has at some point influenced their online shopping decision. Almost 61 per cent of the respondents from China said they frequently base their decision on the happenings on their social network.
Even among the older population — aged 65 and over — 26 per cent of respondents said they frequently base their shopping decisions on happenings in their social networks. That compares with a global average of just five per cent in that age group.
However, the influence of social media on consumption varies dramatically by country and by age. Between two-thirds and three-quarters of connected consumers in the US, UK, Germany, and Japan say they rarely or never consider social media chatter when thinking about products, services, or brands to buy.
4. Tickets and fashion are the biggest drivers online in India
Tickets and fashion are two categories where Indian consumers display higher propensity to purchase than the global average. Eighty four per cent of the respondents have bought fashion and apparel online in the past three months in India as compared to a 76 per cent globally. Seventy nine per cent of the respondents bought tickets online in the past three months in India as compared to 54 per cent globally.
5. Indian consumers don’t prefer shopping with purely online retailers
The study also highlighted a very interesting point for the Indian market. Only eight per cent of respondents said they do shopping with purely online retailers. This compares with the global average of 84 per cent. This means Indian consumers prefer to do their online shopping with brands that also have traditional brick and mortar stores.
Mike Moriarty, AT Kearney Partner and Co-author of the study said, “Physical stores remain the foundation of retailing. For those consumers that buy something exclusively online, chances are these consumers will go to a physical store to discover, test, taste or get their friends to weigh in on the decision. The key point is that the debate should not be a question of digital versus physical. Successful retailers understand how each customer touch-point adds value in the eyes of customers, and they develop omni-channel strategies that maximise customer satisfaction and profitability.”