Indian consumers are embracing Internet to research products before making a visit to a local store in a big way; the response from various web-to-store operators in India during the past year shows web-to-store shopping behavior increasingly outpacing online buying.
New research says that offline buying (any service / product) after an online search is $180 billion and online research leads to online buying around $160 Billion globally.
Majority of the Indian internet users reported that there are a multitude of products they prefer to buy in person rather than using an online transaction. But for most of these products, they research internet before making the purchases. This mainly helps them save time and allow them to make informed choices before they actually hit the street.
Web-research before shopping was by far the most popular in comparison with word of mouth, newspaper ads, TV ads and various other means. This across the channel shopping demographic is comprised of younger, wealthier and more experienced online consumers. This group earns much more than other shoppers.
Research by Kapston, an internet consulting firm on products listed online and websites in India indicates that people spend 10 - 20% more on products they don’t research online.
The pioneer in this segment in India is www.offersforshoppers.com, which started operating in 2006, reported a sudden surge of activities from the smaller cities in India and noticed the trend is gaining momentum in Bangalore and Delhi. The CEO, Kumar Setu says
Home decor and Appliances in couple of years will surpass Consumer Electronics and become the #1 category. OffersForShoppers is planning to start operations in 5 more cities in India by the end of 2007.
The growth of the OffersForShoppers Network is testimonial to customer demand for a local shopping tool. We are the first company to come up with the click and brick model in India" says Kumar Setu.
Most of the web-to-store companies use coupons to track the conversion and effectiveness of online advertisement. With a one time set up charge and cost per sales or cost per leads model insulate them from potential technological pitfalls. Web-to-shop also allows them to reach certain cross sections of wealthy customers without big investment.
This is a welcoming trend for small and medium sized retailers who do not have online presence and necessary know-how to market their shop online. As for the not so internet savvy reluctant Indian merchants, these web-to-store websites are a risk free investment. They are beginning to feel the potential of internet as a sale promotion tool.
The biggest challenge associated with web to store in India is in putting local offers online and then track them and update them regularly. The other challenge is the re-allocation of advertisement budget to this new form.
Monday, September 3, 2007
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1 comments:
Offers and prices in India are a lot 'localised' even for nationally distributed brands and it would be a challenge to get this info continuously, on an ongoing basis.
For home electronics, phones and some services, the habit of 'checking on the net' before shopping is now rapidly gaining mainstream status, but for the rest of the shoppers' basket, we see very slow evolution.
In our experience at future Group, the biggest challenge is to change the mindset of people who are in-charge of the ad spends, to consider any new medium.
cheers, Damodar
http://shoptalk-insight.blogspot.com/
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