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May 09, 2015
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Changing Consumer Behavior towards
E-commerce in India
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Agenda
• Indian e-commerce Path to Sustainability & Prosperity: Challenges
& Road Ahead
• Changing Consumer Behavior & Buying Patterns
• Opportunities and scope for diversification
• Segments that will drive growth in next 3-5 years
• Social & Mobile for faster penetration
• Opportunity of Facebook for Customer Acquisition in India
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Path to Sustainability & Prosperity • Lot of momentum behind e-commerce businesses in India over the past
two years.
• E-commerce in India is currently at about INR 75Bn; expected to grow. Consumer and electronic products makes the large chunk of where the market is.
• A variety of innovative products and services are being offered spoiling customers for choice.
• The growth of e-commerce industry in India has been phenomenal as more shoppers have started discovering the benefits of using this platform.
• There is enough scope for online businesses in the future if they understand the Indian shopper’s psyche and cater to their needs.
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• Travel is the largest category in India, followed by consumer electronics
and apparel.
• The e-commerce market in India is smaller than in other markets that
Forrester forecasts in Asia, but it is fastest growing.
• Over the past 12 months, VCs have invested heavily in Indian e-
commerce market, new players have emerged, and the e-commerce
ecosystem has developed. Huge opportunity for companies willing to
work through key logistics and payments challenges in India.
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Challenges
• The Profitability Challenge
• The Financial Challenge
• The Differentiation Challenge
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Growth Drivers
• Payment option • Merchant Push
• Logistical Challenges • Quality of Net Access
• Household Income
• Online Tenure
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Road Ahead
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Growth Ahead
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Growth Ahead
• Today's Online Shopper In India Has Inflated Expectations
Online shoppers expect to see good deals online accompanied by free or
very low-cost shipping.
• Localization is Crucial
Two key areas that companies must focus on in all markets -- localized
payment and fulfillment options -- are particularly essential in India.
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Consumer Behavior & Buying Pattern
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Consumer Behavior & Buying Pattern
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Poised for Rapid Growth E-commerce revenues in India will increase by more than five times by 2016,
jumping from US$1.6 billion in 2012 to US$8.8 billion in 2016. The following
factors are influencing this growth:
• VCs are bullish on e-commerce growth
• Online grocery shopping is starting to appeal to the upper- and middle-
class consumer
• E-commerce is expanding into non metros
• Large retailers are looking to build their online presence
• Social Media and Mobile are helping accelerate e-commerce adoption
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Social & Mobile
• Mobile internet will play a larger role in Market like India; fundamental
behavior of what people will be transacting from Mobile will be different
from what they are transacting on the ecommerce site. It will play
important role not only as a transactional channel but also enabler of
offline retail.
• Online retail has seen a heavy overlap with Social Networking and Search
due to aggressive marketing and strong inclination towards Social
Commerce.
• Expect a larger portion of online retail from Social Commerce with India
positioning itself as one of the fastest growing Social Networked user
base.
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Opportunity of Facebook Marketing
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“Only 20% of marketing budgets are typically spent on retention.
Yet, in many cases, 75% of revenues comes from existing
customers.” Source: Flip the Funnel
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Customer Acquisition
Influence Lead Sale
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Time Has Not Changed
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You were expected to have a Website.
You were expected to have a Blog.
You are expected to have a Facebook
Page.
Hits (2000) > Likes (2010)
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# of Fans: Currency for Success!
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Quiz Time!
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Facebook Edge Rank
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Let’s look at few Case Studies
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25% Revenue through Facebook
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25% of Online Revenue through Facebook
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Over 20% All Sales through Facebook
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INR 1.5 Million Revenue/Month
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30x ROI on FB Ads: 10k+ Tickets Sold
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