Shop Till Connected

Next financial year, Indians are expected to shell out more than

Rs 2,000 crore in shopping over the net

What, buy

online through credit cards? Are you out of your mind, do you want me to go

bankrupt? Okay, I can experiment with online shopping, but not for clothes. I

don't buy clothes without trying them on first...

These remarks are

rapidly disappearing. People are slowly getting comfortable about punching in

credit card numbers online or paying through bank accounts directly. They seem

to be getting around to the idea of a 24x7 shop, as they now know that the stuff

they buy online, does reach them. Some even like the freedom to compare products

at their own pace than being hustled by salesmen. No wonder we seem to have

spent Rs 570 crore in 2004-05, and will end up spending another Rs 1,180 crore

by 2005-06, according to Internet and Mobile Association of India's (IAMAI)

e-Commerce Report, 2005.  A

forthcoming IDC survey tentatively estimates a 60% CAGR and market size of Rs

1,700 crore in 2006.

In comparison,

Americans spent a whopping amount of $25 bn alone in the first seven weeks of

the holiday season of 2005. Most of this is the result of their large numbers

online-200 mn compared to our 39 mn.

Going by what Americans

have spent in the holiday season, according to the Holiday eSpending Report

(jointly released by Goldman Sachs, Neilsen/NetRatings, and Harris Interactive),

apparel worth $4.7 bn was bought over the Net. Then followed $3.7 bn worth of

computer hardware and peripherals, and a similar figure for consumer

electronics. Books came fourth with $2.6 bn, though in the non-holiday season

books are the most bought products.

What do Indians shop

for the most? Books, electronic gadgets, railway tickets, and apparel-in that

order. According to the IAMAI report, about 38% of Indian shoppers (the base of

the survey was 1,716 online shoppers) have spent between Rs 1,000-5,000 in six

months of 2004-2005; 16% said they had shopped for more than Rs 10,000.

IDC sees the key growth drivers as e-travel, e-recruitment, and

e-purchase of consumer electronics.  And

it believes that with greater and faster access, more trustworthy suppliers, and

growing use of credit cards this trend is headed only one way-up.

How many people are

happy with their online shopping experience? Most are, in India as well as the

US. But here's a statement that holds a lesson for Indian e-retailers or e-tailers:

Close to 50% of online shoppers in the US said they were 'very satisfied'

with their shopping experience. However, in the IAMAI report, only 18% Indians

said they were 'highly satisfied' with theirs. If the number of highly

satisfied customers in India can be brought up, that will surely reflect in the

overall sales as well.

There are a number of

enablers that need strengthening. Online shoppers need plenty more-they need

to know if the product is available, at what price or in what deals, when will

it be shipped, how much will be the shipping cost, etc. They want all this

information available on the site at the time of deciding their purchase. Plus,

of course, they want the sites to be faster and able to respond quickly. That is

what will result in compelling shopping. The sellers also need to build

shopper's trust. This exercise needs constant attention-how secure is the

site, what are the new ways the site has to deal with; ID theft or bogus

transactions, and the like. Even a cursory comparison with international sites

shows that Indian sites are fewer in number and limited in features. They are at

least a couple of years behind in the evolution-and that, in this business, is

a lot of time.

But there is a lot of

stuff available to buy. Try online shopping this year and share your experience

with us.

Happy e-shopping!