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Rise in e-Commerce pushes firms to adopt Net-based business strategies: IOAI

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Rise in e-Commerce pushes firms to adopt Net-based business strategies: IOAI

e-Commerce in India is on the verge of gaining further prominence. The total value of e-Commerce activities within India has exceeded Rs 570 crore during 2004-05, according to a research conducted by Internet & Online Association of India (IOAI). The report estimates a 300 per cent plus growth rate during the next couple of years. It has targeted a whooping Rs 2,300-crore e-business to be conducted within the country by 2006-07.

A total of 3099 respondent's views were solicited of which 55 per cent (1716) had shopped online and 87 per cent (1493) had shopped more than once forming the base of the report. Changing lifestyles and shopping habits make this a shopping medium impossible to ignore. The report makes actionable recommendations on how online retailers can fill gaps in the online environment as well as how they can utilise unique elements of the online shopping experience to create a competitive advantage over the physical retailing world.

Neville Taraporewalla, Chairman of IOAI, said, "The rapid development of e-Commerce is forcing companies today to adopt business strategies revolving around the Internet. The report reflects the changing face of business trends in India. Today, The Internet population is more than 25 million and is expected to grow to 100 million by 2007. The report can act as a guideline on how online retailers can use this new business environment for their advantage."

"This business module is cost-effective, easily accessible and profitable in many functional areas. Consumers and retailers both desire a safe, simple and comprehensive online shopping experience that will truly realise the range of power of the Internet. The report highlights ground realities of the online shopping environment and shoppers' attitudes & perceptions towards e-Commerce," Mahendra Swarup, Vice-Chairman of IOAI, said.

The IOAI research report conducted in association with Cross Tab Marketing Services has tracked Internet user's proclivity for shopping online. The research was undertaken with a view to understand the profile, internet usage, products purchased along with propensity to buy along with the nuances of shopping online with the shopper's affinity and aversions to online shopping.

According to Preeti Desai, President, Internet and Online Association of India, e-Commerce is coming of age in India. Changing lifestyles and shopping habits, a similar metro/non-metro consumption of Media and Internet and Multiple Internet Access Points will propel e-Commerce transactions to Rs 2300 crore in 2006-2007 from the current Rs 1180 projection for 2005-2006, an over 100 per cent increase. She said, "From a business perspective it offers unlimited shelf space, it isn't bound by operational timings and geographical boundaries and an opportunity to cater to country wide city markets (for consumers and suppliers alike) at a comparative miniscule cost to an audience all set to grow to a 100 million by 2007. From a consumers perspective it allows greater access (hence the high response rate by tier-2 cities) to markets and an opportunity to make informed decisions on purchases."

Here are few of the research highlights:

* 55 per cent of visitors to e-Commerce sites have adopted the Internet as a shopping medium. Of these online shoppers (Base 1716), 87 per cent (1493) of shoppers have shopped more than once and have been termed 'as regular shoppers'. They form the 'base' for this report of users who have transacted online to buy products & services 'more than once'.

* 25 per cent of regular shoppers are in the 18-25 age group, 46 per cent in the 26-35 age group and 18 per cent in the 36-45 age group. 85 per cent of online shoppers are male even a 15 per cent female audience represents a 15 million strong market by 2007-2008 (IOAI Estimate: 100 million Internet users by 2007-08.

* 83 per cent of the user base is educated with a Bachelor or Post-Graduate degree, it represents an educated audience. 54 per cent of online shoppers are at an executive level. 24 per cent of online shoppers are professionals or self-employed, indicating an assured spending power.

* 76 per cent of online shoppers access the Internet from their office, 63 per cent from home & 24 per cent from cyber cafes. Shoppers accessing the net through multiple access points represents a dismissal that Internet Penetration is no more only PC dependant. All Internet activity support e-Commerce in an allied or primary capacity.

* 62 per cent of shoppers having shopped for more than a year. 37 per cent of online shoppers have started shopping online in the last 12 months. 67 per cent of online shoppers have shopped online as recently as three months showcasing the growing acceptance of e-Commerce.

* 67 per cent of online shoppers have shopped online as recently as three months showcasing the growing acceptance of e-Commerce. 53 per cent of online shoppers have shopped online more than five times, 27 per cent of online shoppers have shopped online more than 10 times.

* 20 Products Bought Online: Books (41 per cent), Electronic Gadgets (40 per cent), Railway Tickets (39 per cent), Accessories Apparel (36 per cent), Apparel (36 per cent), Gifts (35 per cent), Computer and Peripherals (33 per cent), Airline Tickets (29 per cent), Music (24 per cent), Movies (21 per cent), Hotel Rooms (20 per cent), Magazine (19 per cent), Home Tools and Products (16 per cent), Home Appliances (16 per cent), Toys (16 per cent), Jewellery (15 per cent), Movie Tickets (15 per cent), Beauty Products (12 per cent), Health and Fitness Products (12 per cent), Apparel Gift Certificates( 10 per cent) and Sporting Goods (7 per cent).


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