The term online shopping was coined by Michael Aldrich in the year 1979. Online shopping is a platform-based business in which customer purchases merchandise directly through the vendor present on the platform.
India has always been traditional when it comes to shopping. There was a mindset that nothing can be bought without touching and feeling the products. However, with the current compulsion of maintaining safe distance and the increasing awareness of digitalization things are changing very fast. There has been a significant shift towards online shopping.
India has an internet penetration of nearly 50%. This means that around 0.7 billion population has access to the internet. India is the second largest internet user across the world after China. The key reasons for the phenomenal growth of online industry in India are the following:
Prospering middle-class families: There has been substantial growth in the standard of living of the middle-class families. The aspiration and disposable income of this segment have increased.
Availability of wide range of products: There are vendors listed from across the Country. There are big brands and premium products listed on the eCommerce platform. Also, For small vendors now selling their products has become more convenient with the increased reach. Customers have an option to choose from a wide range of products, which is not possible offline.
Attractive prices: The price offered online is far more reasonable as compared to the price offered at the stores. Customers can buy premium products at a much reasonable price than what is offered at stores. Thus, making it economical for customers to purchase.
Accessibility in remote areas: The aspiration amongst people in Tier 2 and Tier 3 cities are increasing. The access to social media and digitization has made people more brand conscious. But all the premium products are not available in small towns. However, with the online presence now products can be purchased and delivered to the remote areas, thus making it accessible to customers and fulfilling their aspiration.
Busy lifestyle makes it convenient for people to purchase online: Busy lifestyle of customers doesn’t allow them to visit stores. They have to wait for either weekends or some holiday. But in case of online shopping, they can shop anytime from anywhere. Hence, it has become more convenient for people.
Easy Return Policy: The return policy in the online shopping is very easy and convenient. If customer doesn’t like the product, it can be exchange with other product or can return with the receipt of full refund, provided not damaged, which is unlike in case of offline shopping.
Social Media Influencers: Social media are playing very important role in influencing the younger generation. The awareness of brands and availability of different online websites are often shared by the social media influencers. Thus, creating more buzz amongst the youngsters.
Other important factors: There are other factors as well like cash on delivery, cashback offers etc. which equally plays very crucial role in favor of online shopping
During the pandemic, when the world was shut down amidst the lockdown, online shopping in India saw a huge growth. As quoted by Business Today, the Indian e-retail market witnessed a growth of almost 25% in FY 21. While India is the third largest online shopper, the market still remains untapped. There is a huge potential to reach India’s large internet user base of approximately 626-675 million. It is believed India’s Ecommerce market will grow exponentially in the coming future because of the rapid technological growth, economies of scale and the change in mindset.
Authored by Khyati Jha, Novelist and An Investment Banker