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How does India shop online?

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Over 60% of people prefer shopping via apps over websites with a clear preference for marketplace apps

New Delhi: The day-to-day inception of new brands in the e-commerce ecosystem has changed the shopping behaviour of customers online. There have been different changes in purchasing habits, choices, and mindsets of online shoppers nationwide.

Approximately 12.5 crore consumers in India have embraced online shopping, with a significant portion hailing from tier 2, 3, and 4 cities. Online shopping has emerged not only as a convenience but as a lifeline, especially for individuals in these regions where access to the latest products in physical stores is limited, according to a report titled How India Shops Online: Consumer Preferences in the Metropolises and Tier 1-4 cities by PwC India, released at an industry event by the Retailers Association of India.

These consumers, distinct in their digital literacy, infrastructure access, and socio-cultural influences, are driving a retail revolution in the country, the report said, adding that this presents a monumental opportunity for brands to tap into this booming market.

“India’s online consumption gravity is decisively percolating to markets beyond metros. This report creates an industry-first insight on some of the unmissable category-wise nuggets a brand needs to imbibe to success in the rest of India,” said Ravi Kapoor, Partner and Leader – Retail and Consumer Goods, PwC India.

What drives online shopping?

Urban-Rural Disparity

A significant shift is observed in the shopping behaviours of consumers from tier 2, 3, and 4 cities, compared to their urban counterparts. While urban dwellers are enticed by perennial discounts and the convenience of online shopping, consumers from the rest of India regions are driven towards online shopping by factors such as limited product availability and stockouts in local offline stores.

App Preference

Over 60% of surveyed respondents prefer shopping via mobile apps due to ease of navigation, user-friendly interfaces, and vernacular support, highlighting the importance of app-based platforms in India’s e-commerce landscape.

Influence of Social Media

Social media platforms play a pivotal role in driving product trials, with 62% of users trying products after seeing them on platforms like Facebook and Instagram. Urban and rest of India consumers exhibit differing preferences in social media channels for product discovery and trials.

Payment Preferences

While both urban dwellers and the rest of Indian consumers display comparable acceptance of UPI payments, cash on delivery remains the preferred option among the latter to minimise fraud risks. Generation X from the rest of India regions prefers card transactions for mid-high-value purchases, citing transaction safety as a key factor.

Category Preferences

The report delves into specific category preferences among consumers, highlighting varying trends in fashion, sports and fitness, electronics, home and kitchen, beauty and personal care, health and wellness, and grocery segments. In these categories, urban dwellers prefer online shopping for its quick delivery which meets their demand for instant gratification, even if it means paying a premium. In contrast, the rest of Indian consumers focus more on finding the best deals and discounts online.

More insightful and stimulating conversations on technology trends in retail are expected at the Phygital Retail Convention (PRC) 2024.

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