Online shoppers in India will grow from 50 million in 2015 to 175 million by 2020
Online shopping has become a way of life for a number of Indians and the number is increasing day by day. And India is on the verge of making another world record. The total number of online shoppers is estimated to grow from 50 million in 2015, 3.5 times to touch 175 million by 2020. And it will drive 25 per cent of the total organized retail sales of $240 billion in India by 2020 and will reach $60 billion in gross merchandising value. These are findings of a report entitled ‘Digital Retail 2020’ by Google and AT Kearney, which was released recently.
‘High-value’ Customers: According to the report, of the 175 million online shoppers in 2020, the top 60 million ‘high-value’ customers will contribute to 68 per cent of total spend. Customers from higher income classes who live in Metros and Tier-I cities are more likely to be of high value and will account for a similar share in spending.
Value-added services will be a key differentiator and over 90 per cent of online buyers will be willing to pay for premium value-added services; over 46 per cent said they will be willing to pay extra charges for faster delivery; 37 per cent for hassle-free return and 35 per cent were willing to pay more for extended warranty.
Women’s role: According to the report, India will see a 5x growth in the number of women online shoppers by 2020 when they will more than double their share of online spend. They are likely to spend more on lifestyle categories, such as apparel and accessories, and look for the latest trends and brands online. They would increase their spending of online shopping if they get more options for flexible delivery time, more pick-up locations, so that they don’t have to divulge too many personal details.
Changing interest in Categories: Another important change foreseen is, Lifestyle (apparel and accessories) as a category will overtake consumer electronics to become the largest online category by 2020 at 35 per cent of the total online spends. Consumer electronics will be at 20 per cent by 2020.
Other categories such as home (furniture and furnishing) and personal care will see high adoption due to assortment and convenience of purchase, especially in Tier II + cities. Omni-channel presence will become key in home and furnishings, lifestyle and consumer electronics category to serve the need-gap of non-buyers.
According to the report, by 2020, 55 per cent of online shopping will be by cashless transactions as opposed to 40 per cent today. Mobile wallet share will double by 2020 to reach 15 per cent from current 8 per cent.
The report was compiled by combining primary research of over 3,000 consumers, qualitative interactions of over 60-plus consumers and AT Kearney’s proprietary model predicting e-commerce spend across categories, income segments and geographies in 2020. Respondents comprised 1,380 online buyers, 1,380 non-buyers, sellers, non-internet users across 20 cities in India including Metros and Tier-I, II and III cities.
Bottom line: Though all these calculations are based on the amazing growth in the number of online shoppers during the recent years, the ongoing trend is in line with the predictions contained in the report. And we won’t be surprised to witness a revolution taking e-commerce to new heights by meeting the consumer expectations. Anyway, one thing is certain, E-commerce will make our life more comfortable, by saving our shopping time tremendously, which we could add to our quality time to make our life more beautiful.