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.).
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
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.
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
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.