Demystifying Indian e-commerce consumers

Current state of Indian e-commerce industry

E-commerce has seen unprecedented growth and success lately and that has been widely talked about. Looking a bit deeper, the sheer volume of interest by consumers for online shopping has grown exponentially in the last three years in India. What’s interesting is that the trend of online shopping started out in the South from Tamil Nadu and has travelled to the very northern and eastern corners of India, with now Mizoram, Meghalaya and Manipur accounting for most searches for online shopping as of June 2014.

But this is not the end of the growth story. With international players like Amazon pushing growth aggressively and Walmart online retail set to enter Indian markets, steep competition and pricing wars will define the next phase of e-commerce in India.

What are the market needs?

The three main challenges faced by the e-commerce industry/companies in India are:

1. Everyone targets the same market/audience.
2. Discount and price competitiveness is the main sales strategy used by the brands
3. An Integrated approach is missing

India represents a unique market where the affluent and growing middle class has access to the Internet, are pervasively social, have an increasing purchasing power and high aspirations resulting in intent to purchase the best brands, purchase the latest gadgets and travel frequently. But, purchase decisions are still very price sensitive. This results in large and small ecommerce companies fighting neck to neck for the same customer across different segments with different strategies and increasingly lowered costs.

Question is do e-commerce players take advantage of social conversations to understand the customer needs, segment them and have a unified strategy to build long term loyal customers?

What do the consumers really need?

Earlier this year, ThoughtBuzz, a social analytics business, analyzed social media with keywords specific to brand names and comprehensive list of products and services available in the e-commerce space.

Results showed that the Indian youth is more fashion hungry when it comes to online shopping. The most searched product category is shoes, followed closely by apparel. With a number of online shopping portals like Myntra, Flipcart, Jabong, Zovi and AmericanSwan getting fashionable apparels and accessories at affordable price, it’s a dream come true for consumers. Interestingly, home & kitchen is the next most discussed category on social media. This indicates that the homemakers, the young wives and the working mothers are jumping on the online shopping bandwagon as well.

Promotional campaigns and discounts are the main tricks attracting online buyers. Indian online buyers are not brand loyalists and are more price-sensitive than Singapore or Philippines market. Top two issues faced by online shoppers were delay in delivery and issues around online payments.

What role does social media play in e-commerce?

The two main reasons why social media can play a big role in the future of e-commerce is:

1. Consumers across demographics have embraced social media and are looking for brands to reach and engage them. E-commerce companies need to “be social” to connect with these social first consumers.
2. Right mix of influence marketing, contextualized and personalized campaigns and real-time targeting would enable brands to convert fans into friends into advocates thus impacting their bottom-line.

This brings us to the key question of how can brands identify and tap social consumers? The lead can be a direct lead when a netizen is searching for a product, comparing products, asking for reviews and recommendations or is un-happy with the competitor and looking for a solution. But those who want to champion the lead identification need to take charge of indirect leads as well. These are those netizens who are celebrating an event, going to a party, planning for their prom night, or are going to visit their family after years. If a brand is able to identify such instances and come up with a strategy to reach out to them, then the brand will be able to successfully champion social for business.

To sum it up, below are five pointers for e-commerce industry to crack the India market using social platforms:

1. Differentiate with quality and experience to go beyond just fighting over price
2. Go social and have an integrated strategy for customer acquisition, shopping and loyalty system
3. Do not only compete but create your own market by reaching out to new customers through social monitoring and insights
4. Real time analytics to understand and maneuver your strategy is important for online business
5. Keep your friends close and your enemies closer. Building effective strategies to manage an irate customer online on social media is critical.

Patro is the co-founder & COO of ThoughtBuzz, the social media analytics arm of TO THE NEW, specialising in social media analytics and business intelligence. With a background in technology and passion for market research and consumer behavior analysis, he loves helping clients in solving a problem and taking their business to social.