Demographic Details of Online Buyers in India

28/06/2021

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Demographic Details of Online Buyers in India

E-commerce refers to the market that involves the online selling of goods and/or services to a private user (B2C). Various digital devices such as desktops, laptops and mobile handsets are used as mediums of transaction in such businesses. However, it is important to mention here that e-commerce does not include the following:

Downloads or streaming of digital media content (e.g. music downloads, eBooks)
Services that are digitally distributed
Digital distribution of goods in B2B markets
Resale or purchase of any used, defective and repaired items (reCommerce)
Sales between private persons – C2C markets

Revenue Status of E-Commerce in India

In 2020, the projective revenue output in the e-commerce market is tipped to scale INR 2,958,072 million with the Average Revenue per User (ARPU) being approximately INR 5,392.54 per user. A growth rate (CAGR 2020-2024) of 11.1% in revenue generation by e-commerce is, therefore, anticipated this year. This is expected to result in the projected market volume of INR 4,502,790 million by the year 2024.

The table below reflects the current (2020) Revenue Status and Growth figures in different market segments:

Market Segment

Fashion

Electronics and Media

Toys, Hobby and DIY

Furniture and Appliances

Food and Personal Care

Revenue Status (in million ₹)

848,196.8

950,374.6

314,987.3

168, 932.9

675,580.1

Revenue Growth (in %)

39.49

31.17

29.62

29.88

55.41

The following table reflects the estimated Revenue Status and Growth in different market segments by 2024:

Market Segment

Fashion

Electronics and Media

Toys, Hobby and DIY

Furniture and Appliances

Food and Personal Care

Revenue Status (in million ₹)

1,334,741.3

1,439,960.3

435,312.5

243,251.6

1,049,524.7

Revenue Growth (in %)

8.07

7.38

7.10

6.85

8.10

Online Buyer Demographics

In order to become a successful online seller, it is vitally important to find the answer to a very crucial question – Who buys online? Unless the target audience is identified, it is very difficult to provide any personalized service to them. Without customization, marketing strategies and tactics are not known to provide the desired results. Everything about e-commerce – from the choice of platforms and products to shipping and payment policies, is impacted by the nature of the target audience. Unique buying experiences and higher customer conversion rates can only be generated if all business decisions are geared to suit the needs of the customers. Therefore, for any existing or upcoming online seller, here are few takeaway leads on online customers. These factors must be considered before you take any important business decision:

India presently houses 548.5 million e-commerce users and this figure is expected to rise to 884.7 million by the year 2020.
In 2019, 37.4% of e-commerce users belonged to the age group of 25-34 years.
A gender segmentation study of online buyers in 2019 revealed that a share of 70.8% is taken up by male users and 29.2% are female buyers.
The Statista Global Survey of 2019 reports that 33.8% online buyers belong to the lower income group. A share of 31.5% online buyers are in the medium income group and the high income group supports 34.6% of online buyers.
It is projected that 94% of total e-commerce purchases in 2020 will be domestic.
Online buying trends reveal that 47.1% payments for online shopping are currently done with the help of e-wallets.
The Coronavirus (COVID-19) pandemic in the country and around the world has changed the buying habits of people significantly. With lockdowns imposed to contain the contagion, a sharp rise has been noticed in the number of first-time e-commerce users in India. Earlier, these users had remained reticent with the idea of online shopping. A significant number of people are now using digital payment modes to purchase groceries, medicines and other essentials. This new wave of digital shoppers has nearly doubled the revenue income of leading consumer brands in India.

Online Shopping in India

For any business to thrive, choosing the right product to sell is absolutely crucial. If you are in the business of selling a top-selling category product, you are likely to see more sales. This helps to recover losses if business owners have, in other instances, invested in producing and promoting products that have no demand in the market. Before deep-diving into business investments, sellers ought to critically evaluate the market demand of products they plan to sell. This should help them carefully analyze and accurately predict whether or not their businesses will take off in the long run. To help the sellers make the right choice, here is a comprehensive list of the top five selling-product categories in the e-commerce marketplace:

Fashion Items

India’s total retail e-commerce revenue earnings are tipped to increase by 23% by 2021. Apparels will comprise the most sizable segment of this. Almost 35% of the combined revenue generated from online sales comes from apparels. The soaring popularity of the fashion and apparel industry can be attributed to the following factors:

Effective filters: Various online fashion stores offer a wide range of filters. This allows the buyer to locate what he/she wants with great ease and economy of time. About 55% of the buyers report that the convenience of applying filters to sort apparel and fashion items by size, color, brand, style and fabric, zeroes down the process of selection, and raises the chances of them actually buying the product.
Easy exchanges and returns: Nearly 55% people shy away from shopping online, apprehensive of being delivered fake or low quality products. However, most online fashion stores have now ably crossed this barrier by providing buyers the comfort of easy exchanges and returns.
Dropshipping: Dropshipping is a growing and popular trend among small and medium fashion businesses. Goods are shipped directly by the manufacturer, retailer or wholesaler as per the customer’s specifications. This allows customer service to take precedence over all else leading to a rise in consumer satisfaction levels and boosting the number of clients.
Better content marketing: Fashion item sellers make great use of promotional videos, customer reviews and photo tools to attract customers. Overall, fashion is a fast-moving segment, and with the creation and distribution of relevant content to generate high traffic, sellers win clients easily and frequently.

Technology Products

Consumer electronic goods, such as smartphones, laptops and digital cameras are some of the most popular purchases made through digital platforms. E-commerce is the first go-to option for most tech lovers. Savings earned through numerous cashback offers, sales promotions and bank offers attract buyers to purchase consumer electronic goods online.

Food and Groceries

About 48% of Indians like to order their favorite meals online. It is convenient as it saves time and reduces the overall cost. The food industry has an extensive reach and taps into a diverse market space.

Apart from the food industry, triple-digit growth rates have also been observed in India’s hyper local e-grocery market. This has happened primarily due to three reasons:

- Affordable pricing
- Variety of benefits
- Free/priority delivery

Toys and Games

The current revenue income in the toys and games segment amounts to INR 2,460,128 million. This market segment is expected to show the annual growth rate of 9.6% (CAGR 2020-2023) over the next couple of years. This rise in sales can be attributed to:

Growing popularity of animated films
Increase in the disposable incomes of families
Technological innovations such as AR/VR headsets
Launch of educational gaming
Increased usage of tablets and laptops

Beauty and Personal Care Products

According to the estimates, the Indian beauty and personal care (BPC) industry is presently worth USD 8 billion. The following are the reasons why people prefer buying beauty and personal care products online:

Free shipping
Offers and discounts by online stores
Greater variety of quality products and better brands
Genuine customer reviews

Conclusion

E-commerce is among the fastest-growing sectors in India and with a plethora of opportunities for online sellers, it will continue to grow rapidly over the next few years. If you too wish to reap the benefits of selling online, register now on Amazon and enjoy the best seller experience.

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