News / Asia

India Witnesses Online Shopping Boom

Workers are seen at their workstations on the floor of an outsourcing centre in Bangalore, February 29, 2012.Workers are seen at their workstations on the floor of an outsourcing centre in Bangalore, February 29, 2012.
x
Workers are seen at their workstations on the floor of an outsourcing centre in Bangalore, February 29, 2012.
Workers are seen at their workstations on the floor of an outsourcing centre in Bangalore, February 29, 2012.
Anjana Pasricha
India is witnessing an online shopping boom as more and more people get comfortable spending money with the click of a button. The total e-commerce market has increased some 400 percent in the last five years. India's retail industry is responding to the demand from the country’s tech-savvy, increasingly wealthy young population.

Whether it is cosmetic jewelry, handbags or watches, 30-year-old Shweta Andrews no longer waits to visit stores or shopping malls to clinch a deal. She says her busy work schedule makes it easier to surf e-commerce retail shopping sites that have sprung up in recent years.  

“I really love it," she said. "Anytime, just take out 15 minutes, if you have something in your mind that you want to buy, just go to that particular website, buy it, so that’s, you know, great. It’s better than going out because I can do it everyday.”  

E-commerce is still a small fraction of India’s $500 billion retail market. But sales are soaring as young people, who are spending more and more time on the Internet, become comfortable with online transactions.

India now has about 20 million active online shoppers, who mostly browse online for clothes, accessories, footwear, consumer electronics and beauty products. A majority of these customers live in the country’s bigger cities. 

They are being lured by companies like Snapdeal.com. 

Kunal Bahl, co-founder of Snapdeal.com, went online three years ago after many customers said they wanted to buy the coupons and discount cards he sold through stores on the web. Today his online site has expanded into selling an array of retail products.

“We instantly saw action," he said. "What we thought we would do in sales in three months, we did in one week, in the first week. And that gave us further conviction that for completely uninitiated entrepreneurs in the online space, we seemed to be doing reasonably well. So clearly that is not because of our efforts, but because of the inherent demand that exists in the market.”

Bahl hopes that he will hit sales of $1 billion by 2015.

Turning a profit

However, growing sales may not solve the problems faced by online retailers. That is because while the number of transactions is growing by the day, companies are still struggling to turn in profits.

Shabori Das at the market research firm, Euromonitor, says most online retail companies lure customers by offering big discounts, free deliveries and the option to pay cash on delivery. He says that is hurting their profit margins. 

“When you compare the average cost of acquisition of a customer, it is very high as compared to the average item sold through a website," said Das. "When you are acquiring a customer, you have to take into account the cost of the item, the cost of shipping, the cost of packaging and in most cases when you do cash on delivery, you are basically providing the product on credit. So these expenses add up.”

Still the retail goods market that is expected to grow by 17 per cent every year is encouraging more and more entrepreneurs to go online. They say the lack of infrastructure in Indian cities will encourage more people to shop on the web in the years to come. Many of the smaller towns lack supermarkets or shopping malls. In bigger cities, traffic snarls and parking woes sometimes deter even committed shoppers from venturing out.     

Success story

Rahul Jagtiani, whose family is in the interior design business, defied skeptics to go online with plushplaza.com, which sells home décor and gift items.  

"That time everybody felt this is not going to work online, there is a certain emotional connect, there is the whole touch and feel factor which you don’t get. But I felt if products are showcased well, and the photography is good and your integrity is good, we can bridge that gap, and it’s been pretty good so far," Jagtiani said.

Business has been good due to customers like Shweta Andrews, who say online shopping is the way to go.

"Online, what happens is, you always get discounts. No matter what season, whether it is fresh stock or anything, you always get discounts. That is the benefit. You save time, you save money," Andrews said.

Two thirds of India’s 1.2 billion population is under 35 years of age. Market research firms say that is exactly the segment that has growing incomes and aspirations, and is expected to drive the overall e-commerce market up from $10 billion at present to $70 billion by 2020.

You May Like

Karzai's Legacy: Missed Opportunities?

Afghanistan's president leaves behind a much different nation than the one he inherited, yet his legacy from 13 years in power is getting mixed reviews More

Video Secret Service Chief Under Fire for White House Security Breach

Julia Pierson faces tough questions from lawmakers after recent intrusion at White House, says: 'It is clear that our security plan was not executed properly' More

Frustrated, Liberian Students Want Ebola Fight Role

Thousands have volunteered to go to counties, rural villages to talk to people in their language about deadly virus More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Malaysia Struggles to Stop People Joining Jihadi
X
Mahi Ramakrishnan
September 30, 2014 2:16 PM
Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Malaysia Struggles to Stop People Joining Jihad

Malaysian authorities say militant groups like the so-called "Islamic State" have used social media to entice at least three dozen Malaysian Muslims to fight in what they call "jihad" in Syria and Iraq. As Mahi Ramkrishnan reports from Kuala Lumpur, counterterrorism police are deeply worried about what could happen when these militants return home.
Video

Video Could US Have Done More to Stop Rise of Islamic State?

President Obama says airstrikes against Islamic State militants in Syria will likely continue for some time because, in his words, "there is a cancer that has grown for too long." So what if President Obama had acted sooner in Syria to arm more-moderate opponents of both the Islamic State and the Syrian government? VOA State Department Correspondent Scott Stearns reports from the United Nations.
Video

Video Treasure Hunters Seek 'Hidden Treasure' in Central Kenya

Could a cave in a small village in central Kenya be the site of buried treasure? A rumor of riches, left behind by colonialists, has some residents dreaming of wealth, while others see it as a dangerous hoax. VOA's Gabe Joselow has the story.
Video

Video Iran's Rouhani Skeptical on Syria Strikes

Iranian President Hassan Rouhani expressed skepticism Friday that U.S.-led airstrikes in Iraq and Syria could crush Islamic State militants. From New York, VOA’s Margaret Besheer reports the president was also hopeful that questions about Iran’s nuclear program could be resolved soon.
Video

Video US House Speaker: Congress Should Debate Authorization Against IS

As wave after wave of U.S. airstrikes target Islamic State militants, the speaker of the Republican-controlled House of Representatives says he would be willing to call Congress back into session to debate a formal, broad authorization for the use of military force. VOA’s Michael Bowman reports from Washington, where legislators left town 10 days ago for a seven-week recess.
Video

Video Ebola Patients Find No Treatment at Sierra Leone Holding Center

At a holding facility in Makeni, central Sierra Leone, dozens of sick people sit on the floor in an empty university building. They wait in filthy conditions. It's a 16-hour drive by ambulance to Kailahun Ebola treatment center. Adam Bailes was there and reports on what he says are some of the worst situations he has seen since the beginning of this Ebola outbreak. And he says it appears case numbers may already be far worse than authorities acknowledge.
Video

Video Identifying Bodies Found in Texas Border Region

Thousands of immigrants have died after crossing the border from Mexico into remote areas of the southwestern United States in recent years. Local officials in south Texas alone have found hundreds of unidentified bodies and buried them in mass graves in local cemeteries. Now an anthropologist and her students at Baylor University have been exhuming bodies and looking for clues to identify them. VOA’s Greg Flakus has more from Waco, Texas.
Video

Video Ebola Robs Liberians of Chance to Say Good-Bye to Loved Ones

In Liberia, where Ebola has killed more than 1,500 people, authorities have worked hard to convince people to allow specialized burial teams to take away dead bodies. But these safety measures, while necessary, make it hard for people to say good bye to their loved ones. VOA's Anne Look reports on the tragedy from Liberia.
Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.Colonel Steve ‘Spiros’ Pisanos left Greece and came to the U.S. to learn to fly. He flew fighters for the Allies in World War II, narrowly escaping death multiple times.

AppleAndroid