Indians voted online shopping (98 percent) as the top reason to access internet; closely followed by social networking (96 percent), revealed a recent survey conducted by American Express and Nielsen to gain consumer insights on online buying habits. The American Express and Nielsen survey titled ‘Understanding Online Consumers’ was conducted across six cities – Delhi, Mumbai, Bengaluru, Jaipur, Ahmedabad and Hyderabad. The survey revealed interesting insights about consumer behaviour pertaining to online shopping, online banking and e-commerce, among others.
The young prefer cards over cash-on-delivery; quick and safe refunds being the key
The survey found that 70 percent Indian consumers prefer online shopping with cards over cash on delivery; quick and safe refunds being the key reason for their preference. The young professional (age group: 26-30yrs) who has moved to an established phase in his career and has higher spending capacity is the core audience who prefer cards over cash on delivery. Almost all responding youngsters claim to have shopped online in the past year.
Indians don’t like queues; Mumbai is an exception
The survey revealed a growing affinity towards online payment of utility bills. Three out of four people pay their utility bills online. Tech-savvy youth (age group – 18-30 yrs.) aptly targeted by online recharge and utility bill payment platforms; show higher adoption rates (81 percent) for online utility bill payments. Delhi and Bengaluru lead the country with 81 percent respondents paying bills online, Jaipur and Ahmedabad close behind with 75 percent and 72 percent respectively; surprisingly Mumbai bucked the trend with only 69 percent respondents.
Deals and value-for-money proposition drives India to shop online
With a booming e-commerce and e-services market, brands have become price-competitive, 60 percent of respondents cited that they get enticed to shop online during discount days. Apart from comfort of buying online and ease of comparison of products, users buy products online because of cash back offers (40 percent), discount coupons (38 percent), freebies and additional offers (35 percent).
All youngsters shop online frequently; ease of payment and product comparison being the key
Almost every consumer in the age group 18-35 years (18-25 yrs- 99 percent; 26-35 years-98 percent) admitted to shop online frequently. Only 61 percent of consumers falling in the age bracket 46-50 years have shopped online in the past year, while only 37 percent have intentions of doing so in the next 12 months, showing a stark conservative approach towards online purchasing as we move up the age ladder. In contrast, youngsters appear to be more indulgent with 83 percent in 18-25 years and 92 percent in 26-30 years age groups having plans of online shopping in future. The reasons that they cited towards their affinity to shop online are comfort in paying through online and ease of comparison among products.
The survey also states that men clothing (57 percent) and footwear (53 percent) are the most frequently purchased products online; with North India more inclined towards buying men’s clothing/ footwear/ accessories in the next 12 months. Additionally, 51 percent of Metro users intend to purchase mobile/ tablets online in comparison to 37 percent of Tier 1 users.
Indian women score over men; high usage of credit and debit cards
Women are more active on internet. Indian women have taken the lead in online transactions, leaving behind men across the country, as 74 percent female respondent use plastic money for their online transactions. Women are using credit and debit cards to shop on their mobiles (98 percent) and book flights online (56 percent). Women participants (98 percent) also have higher penetration of mobile apps as compared to men (81 percent)
Home budget spending to double in the near future
The average online monthly spend of Indians is Rs. 9400; in metros the average spend is Rs 10,900 while in Tier 1 cities it is Rs 8,000, according to the survey. This is going to increase across cities to an overall ticket size of Rs. 16,000. Consumers currently spend 60 percent of their home budget, online which is dedicated to online shopping, making travel purchases and utility bill payments. Convenience and discounts are the prime reasons that encourage them to spend a large part of their home budget online.
The Indian traveller goes DIY, books travel tickets as well as insurance
While online shopping is the top priority, online travel spends comes second in terms of monthly budget allocation by the consumers for online transactions, the third one being utility bill payments. Interestingly, Indians like to do their travel bookings themselves, with around 44 percent showing their preference for booking their tickets on their own. While metros have close to 60 percent share of such individuals, this trend is yet to catch up in tier 1 cities like Jaipur and Ahmedabad where consumers are dependent more on travel agents.
Online travel portals are the most preferred medium to make travel bookings (42 percent), with air travel becoming the norm across cities (93 percent). Across all age groups, users prefer online travel bookings because of convenience (57 percent) and economical deals (51 percent); experienced travelers also buy travel insurance (64 percent) online. In terms of demographic share, online travel bookings are dominated by early jobbers between the age group of 26-30 years.