INDIAN E-COMMERCE TRENDS: Q1 2016
EXCITING INSIGHTS & ANALYTICS BY OnlineSales.ai

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INDIAN eCommerce WEB TRENDS: Q1/2016
EXCITING INSIGHTS & ANALYTICS BY OnlineSales.ai

Indian e-commerce scene has seen an exciting growth over the last few years. It is expected to grow by 65% to be worth $38B in 2016 over its 2015 size of $23B according to industry body Assocham1. This will be supplemented by the fact that the online Indian population is estimated to cross the 450m mark in 2016 according to Internet Live Stats2, a growth of 30% Y-o-Y and covering nearly 35% of the Indian population.

Beyond the obvious categories that would do well like apparels, electronics, cosmetics; we’ve seen significant traction on product lines that had several skeptics earlier - like furniture, jewelry and even gourmet food. With the user experience getting better with each passing day and given the convenience of price comparison, returns & cash-on-delivery, Online Buying has become the primary mode of shopping for millions of Indian shoppers.

OnlineSales.ai has the privilege of working closely with 100+ awesome Online Retailers & Marketplaces in India, and this report is OnlineSales.ai’s attempt at publishing India’s first ever detailed study on e-Commerce trends & opportunities for Online Retailers. The data leveraged to ground this analysis is portrayed below -

100+
Retailers
1.6+ Billion
User Events
1.4+ Million
Purchasers
2+ Million
Transactions

Notes

  • Data is for the months of January, February and March 2016
  • The report neither prefers, nor is skewed by any e-tailer in particular
  • Data covers purely Online Retail. It doesn’t include Digital Goods or Travel Segment.
  • This report covers Web only data - across Desktop & Mobile Devices

INDIAN MEN SHOP ONLINE 3X MORE OFTEN THAN INDIAN WOMEN

Indian Men outweigh Women 1:3 when it comes to online purchases. Also, Indian Men convert 75% better with about 21% higher Average Order Value (AOV).

OnlineSales.ai's Take: Contrary to popular beliefs that Women spend more time shopping, the reality is that Men don’t shy away from shopping online.
Intuitively, Men do spend more time Online than Women - whether it’s at work or at home. Also, they tend to probably take the final call on high ticket items - especially in categories like Electronics and Furniture.
OnlineSales.ai Suggests: Retailers should have specific messaging strategy differently for Men and Women - whether it’s on the store-front or it's on your Digital Marketing Creatives - to further improvise on the conversion rates & buyer repeat ratios for better Lifetime Value.
Did you know this? Click Throughs (CTR) are higher for Men when your Ad Creatives have darker background shade with Price oriented messaging vs. lighter colored shades for Women with popularity oriented messaging. OnlineSales.ai’s platform analyzes every ad element and optimizes for right combinations in an automated fashion.

DELHI-NCR CONSUMES 1/3rd OF ONLINE PURCHASES, FOLLOWED BY A DISTANT MUMBAI

Tier-I3,4,* cities massively dominate the online purchase scene in India with 8 out of every 10 orders coming from them. Even the Average Order Values (AOVs) are 40% higher than other Tiers.

*Tier-I cities include Delhi, Mumbai, Kolkata, Chennai, Pune, Hyderabad, Ahmedabad, Bangalore according to the revised HRA classification by the Government Of India3,4

OnlineSales.ai's Take: While Tier II and Tier III promises an exciting future for Online Retailers, data clearly suggests that Tier I is where the most significant volumes & revenues currently are.
Given higher disposable incomes, proportionately better access to larger screens & high speed internet, and overall better delivery logistics; Shoppers from Tier I cities seem to be savvier to shop more online including bigger ticket-sized items.
OnlineSales.ai Suggests: While some retailers are indulging in futuristic investments to woo Tier II & Tier III shoppers, for e.g. regional languages interface; it is fundamentally important to have a robust strategy on addressing demands peculiar to a Tier-I shopper. This may include better personalization, faster delivery options, smoother check out processes and better user experience overall.
Did you know this? Incorporating regional tastes in your image creative depending on your targeting could boost Click Through Rates (CTR) by up to 60% than otherwise. For e.g. showing a punjabi model showing a punjabi model while targeting Punjab

WEB SHOPPERS PREFER LARGER SCREENS TO THEIR SMALLER COUNTERPARTS BY 2:1

When it comes to ‘Web’ based purchases, Personal Computers (PCs) are still the preferred devices for online purchases with more than 65% of the online purchases coming from them. They also have a 23% higher Average Order Value (AOV) compared to smartphones. Interestingly, while Android commands a higher share of Mobile Web purchases, iOS based Shoppers have 40% higher AOVs!

OnlineSales.ai's Take: Realistically, larger screens (12”+) offer a much richer experience for online shoppers - enabling them to do product research (price comparisons, reviews, etc) before zeroing-in on one to buy.
From above, this trend makes sense, since most of the purchases are happening in Tier I cities where access to larger screens is proportionately much higher.
OnlineSales.ai Suggests: As recently evidenced by Myntra announcing its plan to re-launch it’s Desktop Site, Online Retailers should continue investing on the Web experience, driving seamless experience across user’s digital footprints. Especially for higher ticket value categories like Electronics, Furniture, Luxury Goods, Branded Apparels, etc - the significance of large screen experience is inevitable for the online shopper.
Did you know this? Web Analytics is very well-evolved compared to Mobile App Analytics. It provides amazing data to analyze and optimize the entire experience for the Shopper. OnlineSales.ai enables full-funnel tracking, multi-variable goal optimizations, audience cohorts analytics and lot more amongst its suite of its Insights it provides to the retailers.

CASH-ON-DELIVERY (COD) REMAINS THE MOST PREFERRED WAY TO PAY ONLINE, WITH 70% OF THE PIE

Payment options like Net-Banking, Credit & Debit Cards and e-wallets combined only contribute to about 30% of all online purchase as compared to Cash On Delivery (CoD). However, the Average Order Value (AOV) on online payments and cards is 20% higher than that on CoD.

OnlineSales.ai's Take: Although there is a push for cashless economy with plastic payments and Net-Banking, but when it comes online purchases, CoD is still the most preferred mode of payment.
Persistent reluctance around using Banks / Cards for payments due to privacy and security concerns may be causing this trend. From the User Experience angle, CoD option does provide a much faster & smoother check out process for the Shopper.
OnlineSales.ai Suggests: For most retailers, CoD is still a necessary evil for expanding business to newer avenues. To ensure this mode of payment doesn’t negatively impact the bottom-lines, some Retailers have already pushed up the “minimum order value” for CoD eligibility or have started charging a ‘convenience fee’ for this mode of payment.
Did you know this? Order Cancellations are as high as 30% across retailers. CRM integrated Audience Cohort analytics could provide some significant insights to predict & curb the Order Cancellation rates. In its next release, OnlineSales.ai plans to offer CRM integrations that will provide a seamless Order Tracking mapped back to the ad & messaging - allowing for some ridiculously insightful & actionable analytics.

IMPULSIVE CATEGORIES LIKE CLOTHING & MOBILE ACCESSORIES MAKE UP 60% OF ONLINE PURCHASES

Indian shoppers love to spend on accessorising themselves or their smartphones with over 60% of transactions occurring in these two categories. However, in terms of Average Order Values (AOV) & overall Revenues, Electronics still rule all other categories.

OnlineSales.ai's Take: Impulsive buying has been a phenomenon of Retail world globally - whether it's an offline mall or an online store. Lifestyle categories like Clothing, Jewelry, Watches, Mobile Accessories have always done well in attracting consumers in the door.
OnlineSales.ai Suggests: Retailers should invest in enhancing the user experience when it comes to “trying-out” lifestyle items. This includes multiple product views, truer colours, size guides & comparisons and essentially showing the products in the environment in which they would be used. A “try-it-on-yourself” option wouldn’t hurt either. The results would be lesser returns, improved customer stickiness and a higher LifeTime Value (LTV).
Did you know this? Ad creatives with multiple product angles tend to have higher Click Throughs and drive high intent customers than those with only a single product angle. OnlineSales.ai’s Image Ad Creative Platform programmatically generates images with combination of multiple products or angles at scale.

60% OF ALL ONLINE PURCHASES HAPPEN DURING BUSINESS HOURS

Indian shoppers prefer office hours, i.e. 12pm-5pm on weekdays, to complete most of their online shopping. Within the week, it’s Wednesdays & Thursdays get the bulk of the orders.

Night: 9PM to 4AM, Morning: 5AM-11AM, Afternoon: 12pm-5pm, Evening; 6pm-8pm;Red indicates higher values, Green lower

OnlineSales.ai's Take: This trend also corroborates the trends seen above where we see a 65%+ of Online Shopping happening from larger screens.
Interestingly, the shopping spree is seen weaker during fag ends of the month, while it peaks during the mid-month - presumably the effect of monthly pay-cycles.
OnlineSales.ai Suggests: Retailers should invest in handling website traffic and ad delivery during these preferred buying periods. They should also incorporate dayparting in their online campaign management activities for optimum returns on their ad spends (ROAS).
Did you know this? Timing a promotion becomes critical to reap the full benefit of that particular promotion. For e.g. Health-tip based promotions tend to improve ROI by as much as 15%-20% during Wedding Season. Or Cart Recovery emails sent within an hour of cart abandonment tends to have higher response rates than those sent within the next 24/48 hours. OnlineSales.ai’s platform incorporates product level seasonality across channels at scale and constantly calibrates the trends automatically.

SHOPPERS HAVE MADE AN AVERAGE OF 1.2 PURCHASES IN JFM ‘16 QUARTER

An average indian shopper has made 1.2 purchases in Jan-Feb-Mar 2016. Certain niche categories like Sports & Fitness have shown higher repeat purchases than others. Interestingly, Shoppers who shop from Larger Screens have shown higher repeatability than otherwise.

OnlineSales.ai's Take: Repeat Buying is the Holy Grail for any Online Retailer. Subtle patterns like Repeat Purchases by Device or by Sub-Categories, could go a long way for Retailers to transform their bottom-line.
OnlineSales.ai Suggests: Retailers should stock up on repeatedly purchased merchandise to reduce drop offs from interested buyers. Recently, some of the larger retailers have introduced “subscription” models and scheduled reminders that works beautifully well for categories like Food & Groceries, Health Supplements.
Did you know this? Doing Customer Cohort Analysis and building an experience specific to a particular Cohort drives at least 60% better response rates than generic Remarketing. OnlineSales.ai allows users to create customer segments basis their online purchase behaviour and target them with specific ad-copies across display and email marketing.

REFERENCES

OnlineSales.ai FOR E-COMMERCE

Founded by ex-Amazonians, OnlineSales.ai offers the most powerful multi-channel performance marketing platform for Online Retail. OnlineSales.ai builds predictive intelligence around product merchandise and relevant audience personas - to automate marketing across digital channels like Google Search, Google Shopping, Google Display, Facebook Display, Instagram, Facebook Product Ads, Bing Shopping, Bing Search and Remarketing. Leveraging its proprietary technology platform, OnlineSales.ai works with 100+ eCommerce Brands like eBay, Marks & Spencer, Snapdeal, AskMeBazaar, etc delivering 30%+ upside on digital marketing ROI. OnlineSales.ai manages an estimated ~25% of Indian eCommerce Ad Spends and is rapidly expanding in globally.