Contributed by: Anish Bhuwania (Director, UX Design, Clarice Technologies)

Anish brings to the table over nine years of experience in the creation of user-friendly design solutions that are consistent with business and user goals with expertise in human factors. Across these experiences he has managed key accounts, fostered client relationships, mentored and managed multi-disciplinary teams consisting of user experience researchers, user experience designers, visual designers and developers. He has worked on over 100 User-Centered Design projects for an array of international clients and fortune 500 companies across diverse industry verticals, UI technologies, interface types and touch-points (Web, Desktop, IPTV, IVR, Mobile, etc.).

 

Introduction

The penetration of eCommerce in India may be lower as compared to markets like United States and United Kingdom however is growing at a much faster pace with quite a few new entrants. India is currently pegging at 10 million online shoppers and is growing at an estimated 30% CAGR vis-à-vis a global growth rate of 8-10%. A sizable chunk is dominated by the ‘travel’ sector (ticket bookings with air and railways, while bus, hotels and tour packaging is catching up). Non-travel (e-tailing) buyers float around 2-3 million with ‘clothing & apparel’, ‘fashion & lifestyle’, ‘shoes & accessories’ followed by ‘mobile & electronics’ being the most prominent in terms of sales volume.

Over the last few years India has experienced a spurt in technology advancement with the advent of broadband and 3G penetration as well as smart devices. Convenience of online shopping in view of busy lifestyles, long queues, urban traffic congestion and availability of a wider range of products (incl. international labels) delivered to your door-step (incl. COD) at lower prices compared to brick and mortar retailers attributes to augmenting eCommerce adoption. On the contrary, following are few aspects which may be slowing the adoption of eCommerce in India;

Trust & Quality

Consumers when shopping for tangible products have several queries encircling the product quality and often would like to obtain a first-hand feel of the product (such as the fabric quality, fit, or screen display quality, etc.) and you would notice that few eager shoppers drive down to nearby stores before endorsing their online purchase. With the proximity of stores this is possible in the Indian scenario and driving distances as well as fuel costs may not offer the same flexibility in the United States. Moreover, the apprehension encircling the quality of goods delivered always lingers; having paid for goods consumers desire an immediate sense of satisfaction of ownership.

Many eCommerce companies have tried plugging the holes by making available large sized product images (incl. various perspectives), size guides, and even use dressed-up mannequins/avatars for providing a true picture. However, cautious buyers may still prefer interacting with the product in real-time before an online purchase; not sure if their behavior would change with time. Advent of cash-on-delivery (introduced by Pizza shops) has helped mimic the shop-floor check-out experience and provides immediate gratification for monies spent; this seems to be working well and has taken the business of eCommerce to greater heights. Many e-commerce firms, including Flipkart, Rediff, Infibeam, Yatra, Cleartrip and Makemytrip, offer cash-on-delivery options. Flipkart’s COO and co-founder Binny Bansal says cash-on-delivery drives over half its sales. Most players have reported a figure between 40% and 60%.

“China has had COD [cash-on–delivery] for the last 10 years, and even today a big chunk of e-commerce there happens through cash. I think that will be the case in India too,” – Abhishek Nayak, CEO of Gharpay

Negotiation vs. Price Discounts

Every shopper would like to strike the best deal for their buy; am sure you will agree that Indians have a keen sense of bargaining for price and would walk/drive any distance for a better price. With online competition brewing you would find shoppers wedged amid the huge pricing battlefield and bounce from one store to another for discovering the best-buy. Have you ever experienced walking into a store (e.g. electronic, stationery) and striking a deal with the shop-floor manager over-and-above the tagged price? Try negotiating in comparison to an online/neighboring store deal and you may be pleasantly surprised. Price could be the prime influencer for decision making however the satisfaction of winning a negotiation could be another strong driver for purchase.

The survey conducted by ASSOCHAM between January-June 2012 across ten cities, in which 5,000 shoppers were interviewed, revealed that most online shoppers used internet to evaluate options by gathering information on available products and prices or buy low-value items like gift products, but opted for final transactions at the traditional retail outlets. – Associated Chambers of Commerce and Industry of India

Return Policy

Several brick and mortar stores in India provide the flexibility of returning goods within a stipulated time period once bought; in doing so gain customer confidence and trust. Online stores have yet not matured to the level of offering favourable return policies and often shoppers are forced to accept delivered products. One major advantage that UK online shoppers have over real world buyers is a statutory “cooling-off” period of seven days. You can cancel an online transaction and receive a refund anytime in the first seven working days for any reason…or no reason. Jabong.com is one of the few India-based commerce companies which offers a 30-day free return policy (full order as well as part if ordered for multiple products) which has significantly contributed to their sales volume. Hopefully many more will soon get added to the list of options.

Other Aspects

Broadband Penetration The total number of broadband subscribers including DSL, cable, fiber optic, and broadband wireless platforms is estimated to reach around 15.3 million at the end of 2012. The penetration is currently low however growing at a rapid pace. Glancing at a blank computer screen waiting for products to refresh/display owing to spikes in connectivity speeds and the fear of a transaction being interrupted during check-out due to technical snags are inherent problems which are yet to be fine-tuned.

“Shopping online has become a mainstream activity for the rural people. People are evaluating the option of ecommerce and as the Internet penetrates deeper, more and more people will try it,” – eBay India Director (Category Management), Kashyap Vadapalli

Credit Card Penetration – Unlike in the Western countries, in India cash is used for most transactions. Poor fraud protection policies and the fear of personal information leaking as well as spamming further contributes towards the low adoption and usage of credit cards in India. However, credit card usage is gradually increasing in the premium card segment.

“The country saw a 2 percentage point drop in the number of credit card-holders last year,” HSBC India consumer assets head Manish Sinha

Finally

Several advertising campaigns are being launched by eCommerce companies to reduce online shopping apprehensions of a consumer. I’m sure you must have seen/heard about the new television campaign, titled ‘No Kidding, No Worries’, by the e-commerce portal Flipkart, responds to an online shopper’s worry in a humorous and quirky way. Few companies are using celebrities as curators/advocates for products and in that way hoping to inspire trust in consumers.

The eCommerce scenario in India is fast growing with numerous players and the evolution of product interfaces/platforms and customer experiences have been significant over the last few years. However, in India online buying is buzzing amongst the younger generation from select urban areas and in general is still perceived as being complicated and bumpy. Hence, the grey spot still encircles the dilemma around industry pace versus customer adoption; are they in-sync?

Shoppers and commerce companies will continue to evolve and soon reach to a point of balance sparking a new wave. Amidst such a scenario companies will have to tune online experiences with time in view of customer demographics and psycho-graphics and base their strategies on sound behavioral research. Do you think online stores could ever mimic the in-store experience in totality? Or real-world scenarios could be mirrored by technology (such as augmented reality, virtual assistants, etc.)?

Look forward to your thoughts.

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  1. A very interesting topic and an articulate article put up. Thanks for sharing Anish.

    It reminded me of a project during my graduation where I spent a week in Subhiksha Super Market, clicking photographs, talking to the customers and salesman to comprehend the very reasons for visiting malls/super markets to buy stuff; And whether a similar experience can be mimicked to enhance eCommerce portals. Well there were some interesting insights i wanted to share from my student level research (can be found obvious with our personal experiences). I am jotting them down as i remember, so please excuse me if it is not structured.

    1. Shopping – getting out of the house with family/socialize or simply spend some time out.
    2. Super Markets such as Reliance Fresh, Subhiksha, Big Bazaar etc. – buy general households and stuff – mainly because it is a one stop shop and second the crowd these markets attracts – look for reasonable pricing on products with upfront discounts/deals than uncertainty of ‘value for money’ with vendors, pavements.

    One of the questions asked to the crowd was of course, would they prefer if there was a site which can offer similar experience online. few decision making factors were –

    1. Do not require deliberation – similar to OTC in pharmacy, they are okay to buy if supportive images & information is provided. For example pen drive, movies, wallets etc.
    2. Second time – such as perfumes, one wants to simply buy another of the same product used in the past and wants to look for place where it is genuine at reasonable pricing. basically no need for exploration to like/dislike
    3. require deliberation – products which involve considerable amount. ppl first have hands-on experience visiting a mall for window shopping, check with friends if they got one, youtube or relevant video reviews and most importantly customer reviews & ratings on the eCommerce site. but people who buy online considering all these factors are looking for one place to buy genuine product at less cost. But, there are only certain products which people are comfortable buying.

    —- during by general study/observations, peoples opinion with Flipkart was – it offered good service in terms of delivery time, transparency in communication of shipment through sms/mail/online, ‘packing of items’ and ‘handling’. People emphasised on standard packing of items to ensure utmost care and delivery handled by Flipkart employees. These gained trust and confidence to receive the product in pristine condition – same as one buying personally. —-

    Finally, in my opinion, eCommerce is moving at a steady pace with
    1. Increase of security awareness through various efforts from RBI and other regulators, to encourage people for online transactions on merchant sites
    2. Brands like Flipkart, ensuring to gain people’s trust and confidence

    As you rightly pointed out, one of the missing link in online buying is return policy or Accountability holistically speaking. when a product is broken after few uses – returning within guarantee period, getting in touch with manufacturers customer centre etc. – is not as seamless as the buying experience. Shoppers want to know who can be held accountable for a broken product. I think it would be greatly appreciated by online shoppers, if eCommerce Brands also focus on after-sales services offered. Providing information upfront along with the product, crisp faqs sections and most importantly advertising accountability similar to buying experience.