India’s $850 billion retail sector is on the “cusp of a transformation”, led by the growth of e-commerce and its growing influence on India’s consumers, says a Bain & Company report, produced in collaboration with Flipkart.
While the sector has seen a big surge in the last five years, says the consultancy, there is “significant headroom for further growth”, which they say will “reach massive scale”, and will be driven by access to cheap mobile data for nearly one billion consumers by 2030, growing online spending by digital natives, and innovations such as vernacular-based interfaces, as well as voice and visual searches.
“We expect fashion categories to play a critical role in acquiring online customers, similar to the mature markets of the US and China,” say the authors.
“The Indian e-retail market is primed to reach nearly 300 million to 350 million shoppers over the next five years, propelling the online gross merchandise value to $100 billion to 120 billion by 2025,” they say, adding that the ecommerce trend was already well-established before lockdown, but has been accelerated by it.
Development of the sector will be a win-win for both consumer and sellers. Consumers will gain convenience and more choice; while sellers, even the smallest kirana stores, will be able to establish large customer bases, and keep their operations running 24/7.
Already, over the past few years, the country has seen many small enterprises and homemakers expanding by taking their businesses online, and ecommerce has enabled the creation of millions of jobs.
The report’s authors offer brands a number of key takeaways:
- Brands have just nine minutes – a potential shopper spends less than nine minutes per visit on an e-retail platform.
- Use pictures – One in two visitors browse the image gallery, but only one in 15 click detailed product descriptions.
- Product discovery on e-retail platforms: Consumers are increasingly opting for e-retail platforms for product searches—nearly one in three in India and almost two in three in the US do this.
- Vernacular searches are growing in popularity: For example, “parda” was one of the top three searches in curtains.
- Browse, browse, browse: Online shoppers browse more than 20 product pages before making a purchase. For some categories, such as mobile phones and women’s traditional clothing, that can rise to 60 product pages before purchase.
- Different horses, different courses: Search attributes and preferences vary significantly across categories and consumers. Online shopping data is needed for insight into product preferences of shoppers at a granular level.
Bain & Company; additional content by WARC staff