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India’s e shopping figures going up and up

June 25, 2007

Malls malls springing up everywhere and yet people are e-shopping! And not in small numbers either. E-commerce figures are going through the roof, according to Assocham (Associated Chambers of Commerce & Industry of India). Today (2006-07) the figures are touching Rs. 2200 crore, but are expected to increase by 150 percent by 2007-08 – to Rs 5,500 crores! And two metros – Delhi and Mumbai are driving the growth:

I never thought that Indians would go in for e-shopping in such a big way. I mean, ticketing, travel bookings and even books and movies seem fine to buy online…but personally I have never bought clothes or electronic items online. Knowing that in India sizes vary from brand to brand and quality is inconsistent, even of some electronic items, how is it that there are people buying these items online?

Well, Assocham says that books are the hottest selling item on the internet (no messing around with quality here!). In fact most products bought and sold off online are: books, electronic gadgets and railway tickets. However, people are also buying clothes, gifts, computer and peripherals, and a few are buying home tools and products, home appliances, toys, jewelry, beauty products and health and fitness products.

As traffic for e-commerce sites is mostly coming from the two metros of Delhi and Mumbai, convenience must be the major reason why. Both the cities are spread out over a large area and the best stores in both these cities are often concentrated in certain ‘posh’ areas. In Mumbai for example there are certain items you get only in Crawford market which is at the other end of town in South Mumbai. And demographics show that the population of Mumbai is now concentrated in the suburbs. Ofcourse, huge malls have come up in the suburbs as well, and India’s biggest mall Nirmal Lifestyle is in far-flung Mulund…but often you find a better choice of sizes and styles choice in other malls, say Phoenix (central Mumbai). And though both Mumbai and Delhi have transport systems…few people like to travel for two hours just to get to a shop at the other end of town. Clearly the transport systems leave much to be desired. In Delhi, safety is also an issue for women traveling alone in the evenings.

Actually, a major reason why metros are contributing to e-shopping growth are literacy rates…and the cities’ internet savvy population. Most cities in India have a higher literacy rate as compared to the national average of 64.8 percent. In fact Mumbai has a highest literacy even amongst the cities (86 per cent). Delhi too has a high literate population (81.2 per cent). Oddly, although Bangalore has a higher literacy rate than Delhi, at 83 per cent, the city’s share of e-commerce is not very high. Kolkatta too has a literacy rate (80.8 per cent) and so does Chennai (80.1 percent.) If one compares these rates to literacy rates of cities like Patna (62.9 percent), Jaipur (67 percent), Indore (72 percent) or Warangal (73 percent) its clear why its the metros which are going to continue to lead e-shopping.

In any case, home delivery is a concept that Indians are familiar with…and love. The mall craze has started only now…earlier it was a choice between sweating it out in small crowded markets, or asking a friendly neighbourhood kirana (grocer) to deliver groceries home and this system is still thriving.

Are there any product preferences city wise?
Well, Kolkatta prefers to buy music and movies online, while Bangalore loves to buy books, electronic gadgets, computer peripherals, gifts movies, bookings…actually just about everthing. Mumbai leads in all categories, except jewellery. Delhites seem to prefer buying jewellery online as compared to any other city.

Well, it looks like the future has arrived…but people of my generation are still left wondering…

Update: Another obvious reason for the differences in the e-shopping figures of the various cities is population, which I did not mentioned above. Mumbai’s population is about 18 million (2006), Delhi’s 13.7 million (2001), Kolkata’s 4.5 million (2001), Bangalore’s 6 million (2005), Patna’s 1.8 million (2001), Jaipur’s 2.3 million (2001) and Warangal’s about .5 million(2001). Therefore if Mumbai’s share of the e-shopping pie is about four times that of Bangalore, its because its population is about three times! Population cannot explain all the difference, but certainly its a very important factor.

(Source of graph: Mumbai Mirror)

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8 Comments leave one →
  1. June 25, 2007 4:23 pm

    It was just waiting to take off, wasn’t it? It’s only a matter of time. A peek into the future reveals that anything that is needed but doesn’t have to involve a prolonged analysis while shopping can be purchased on-line. As you rightly suggested, books can be sold like crazy.

  2. June 25, 2007 4:27 pm

    //Delhites seem to prefer buying jewellery online as compared to any other city//- I am surprised. According to me Jewellery should be the last thing to be bought online.
    //Well, it looks like the future has arrived…but people of my generation are still left wondering//…I guess this explains it.

  3. June 25, 2007 6:36 pm

    Good analysis, Nita! I am certain age grouping has something to do with any increases in e-commerce. My son who is in his 30s buys certain items online, things which might necessitate for him to travel about visiting far-apart shops which would take a lot of time, whereas if he goes on-line his search is much more efficient in terms of time and energy spent. Maybe my generation prefers the hands-on, direct experience of goods as quality is more easily determined by seeing and handling items. It is somewhat surprising that books are an item often purchased on-line in India, because books need to be savoured and explored prior to making the decision to buy. But as suburbs enlarge and travel to buy becomes arduous, it makes sense people avail themselves of the internet for shopping – but then it really is, as you pointed out, only a certain segment of populations who have access to computers.

  4. June 25, 2007 6:57 pm

    Suburban, there is nothing quite like the pleasure of feeling, browsing and smelling books! I guess when people are pressed for time they buy online…or perhaps they are buying business books. I know a lot of ocmpanies order books online. Some titles are not available in India. I have ordered books myself…from Amazon. All those books were not available in India. But otherswise i wouldn’t like to miss the pleasure of browsing for anything in the world!
    Prerna, I think the actual numbers must be quite small. Also, there are some branded jewellery items available today (titan for eg) which I guess come with a catalogue.

  5. Phantom permalink
    July 3, 2007 5:01 pm

    Anything that is relatively commoditised and doesn’t need the whole touch-feel-smell-examine pre-purchase experience…can easily lend itself to online shopping. In fact it is really good that indians are taking to e-commerce as it is more efficient than bricks and mortar shopping. The only aspect to e-commerce that can dissuade customers is the effectiveness of the supply chain and logistics, which totally dictate the quality and speed of the shopping experience.
    India is a very young country, close to 55% of the population is 25 and under. So i wouldn’t be surprised if the rate of online shopping keeps rising. Plus, it will serve to stabilise the retail property sector in the cities (which are already suffering from a very explosive property bubble) as less physical retail outlets are re

  6. Ashish permalink
    November 16, 2007 6:26 pm

    ok, now that online shopping is growing and more and more sites have come up, we should also look into and discuss the emergence of comparison shopping sites.

  7. Anish Gurav permalink
    November 25, 2009 4:33 pm

    Hello Nita, I like your articles and blog. There is so much liveliness in your blog. Keep it going. Cheers!

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