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Landscape of Internet Retail in India By Vikram Sehgal

Jan 13, 2015

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Page 1: Landscape of Internet Retail in India By Vikram Sehgal

Making Leaders Successful

Every Day

Page 2: Landscape of Internet Retail in India By Vikram Sehgal

E-Commerce Landscape &

Opportunity in India

Vikram Sehgal

Vice President, Forrester Research

January, 2013

Page 3: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

The Indian Online Population to Grow at an Impressive 25% CAGR

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

100

200

300

400

500

600

2010 2011 2012(F)

2013(F)

2014(F)

2015(F)

2016(F)

2017(F)

Online Population Online Population % of Total Population

3

Source: FORRESTER RESEARCH WORLD ONLINE POPULATION FORECAST, 2012 TO 2017 (GLOBAL)

Page 4: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Internet Access Channels, Metro India

0%

1%

2%

5%

5%

22%

38%

68%

Somewhere else

Library

Outdoors

School

Friend or relative's house

Internet cafe

Work

Home

4

Page 5: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

The Promise of e-commerce

5

Page 6: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

New eCommerce Markets Often Follow A Similar Path

6

Page 7: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Countries Are At Different Phases

7

Page 8: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Online Retail Spending to grow at 57% CAGR

INR 26 INR 42

INR 75

INR 118

INR 186

INR 282

INR 411

INR 0

INR 50

INR 100

INR 150

INR 200

INR 250

INR 300

INR 350

INR 400

INR 450

2010 2011(F)

2012(F)

2013(F)

2014(F)

2015(F)

2016(F)

Total online retail spending

8

Billions

Computers &ElectronicsBeauty &CosmeticsMedia

Apparel &FootwearAppliances

Other

Source: FORRESTER RESEARCH ONLINE RETAIL FORECAST, 2011 TO 2016 (APAC)

Online Retail Does not include Travel, Prescription Drugs

Page 9: Landscape of Internet Retail in India By Vikram Sehgal

e-Commerce in India is in Early Stage of Development

Page 10: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Net New online Buyers to drive growth

0%

10%

20%

30%

40%

50%

60%

2011 2012 (F) 2013 (F) 2014 (F) 2015 (F) 2016 (F)

Growth Drivers – Online Retail

Y-O-Y Growth - Online Buyers Y-O-Y Growth - Online Spending/Buyer

10

Source: FORRESTER RESEARCH ONLINE RETAIL FORECAST, 2011 TO 2016 (APAC)

Page 11: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Growth Drivers for E-Commerce

11

• Online Tenure • Household Income

• Quality of Net Access

• Logistical Challenges

• Merchant Capitalization

• Merchant Push

• Payment Options

Page 12: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Why do Indian Consumers not buy online

0% 5% 10% 15% 20% 25% 30% 35% 40%

I didn't know that you could buy products online

I don't have convenient Internet access

I don't want to register in order to make a purchase

I don't have a credit or debit card

I've heard about bad experiences with others

I want to see and touch before I buy

Don't want to wait for products to be delivered

I prefer to research online & then buy in store

Don't want to give personal financial information

Think products will not be delivered at all

Delivery costs are too high

Products will not be delivered in good condition

It's too complicated

I feel no need to buy products online

12

Source: Asia Pacific Technographics Online Benchmark Survey, Q3 2012 (Australia, China, Hong Kong, India, Japan,

South Korea)

Page 13: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Indians are no more Price conscious than other Buyers

0%

10%

20%

30%

40%

50%

60%

70%

80%

I like to shoparound before

making apurchase

Price is moreimportant to me

than brand names

I would pay morefor products

consistent with animage I like

% Agree with Statement

India China South korea Hong Kong Japan Australia

13

Page 14: Landscape of Internet Retail in India By Vikram Sehgal

The evolution of digital drives complexity & Opportunity…

Page 15: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Internet Retailer Top 20 E-Comm Sites, US

15

Company Category Online Sales 2011 1 Amazon.com Inc. Mass Merchant $48,080,000,000 2 Staples Inc. Office Supplies $10,600,000,000

3 Apple Inc. Computers / Electronics $6,660,000,000 4 Walmart.com Mass Merchant $4,900,000,000

5 Dell Inc. Computers / Electronics $4,609,728,000

6 Office Depot Inc. Office Supplies $4,100,000,000 7 Liberty Interactive Corp. Mass Merchant $3,760,000,000

8 Sears Holdings Corp. Mass Merchant $3,604,288,201 9 Netflix Inc. Music / Videos $3,204,577,000

10 CDW Corp. Computers / Electronics $3,000,100,000 11 Best Buy Co. Computers / Electronics $2,950,000,000

12 OfficeMax Inc. Office Supplies $2,901,497,618

13 Newegg Inc. Computers / Electronics $2,700,000,000 14 Macy's Inc. Mass Merchant $2,246,375,040

15 W.W. Grainger Inc. Home Improvement $2,187,000,000 16 Sony Electronics Inc. Computers / Electronics $1,980,000,000 17 Costco Wholesale Corp. Mass Merchant $1,900,000,000

18 L.L. Bean Inc. Apparel / Accessories $1,716,502,219 19 Victoria's Secret Direct & Bath and Body Works Apparel / Accessories $1,630,000,000

20 J.C. Penney Co. Inc. Mass Merchant $1,590,000,000

http://www.internetretailer.com/top500/list/

Page 16: Landscape of Internet Retail in India By Vikram Sehgal

Majority of U.S Retail Spending Influenced by the Web

Page 17: Landscape of Internet Retail in India By Vikram Sehgal

Resources Used to Research Before Making a Purchase

0% 20% 40% 60% 80% 100%

Radio

Online

Outdoor Advertising

Magazine

Newspaper

TV

Friends & Family

In-Store

% of Indian Online Researchers

Source: Asia Pacific Technographics Online Benchmark Survey, Q3 2012 (Australia, China, Hong Kong, India, Japan,

South Korea)

Compared to the US only 9% of

Population Is Online in India

Page 18: Landscape of Internet Retail in India By Vikram Sehgal

…and it changed peoples mind

0% 10% 20% 30% 40% 50% 60%

Don't remember

Yes, I changed my mind

I didn't have a brand in mind

No, I didn't change my mind

% of Indian Online Researchers

Source: Asia Pacific Technographics Online Benchmark Survey, Q3 2012 (Australia, China, Hong Kong, India, Japan,

South Korea)

Page 19: Landscape of Internet Retail in India By Vikram Sehgal

Content on Company Sites considered a trust worthy source

0% 20% 40% 60% 80% 100%

Ads on Radio

Text Msg From Company/Brands

Ads on Websites

TV Ads

Newspaper Ads

Information on Company Website

Prefessionally Written Reviews

Consumer Written Reviews

Recommendation from Friends/Family

Do not trust Middle TrustSource: Asia Pacific Technographics Online Benchmark Survey, Q3 2012 (Australia, China, Hong Kong, India, Japan,

South Korea)

Page 20: Landscape of Internet Retail in India By Vikram Sehgal

Source: March 11, 2011, “Welcome To The Era Of Agile Commerce” Forrester report

consum

e

become loyal

consider

Embrace touch points to maximize ROI

Page 21: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Thank You

Vikram Sehgal

[email protected]

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Page 22: Landscape of Internet Retail in India By Vikram Sehgal

© 2012 Forrester Research, Inc. Reproduction Prohibited

Slide on Online Research in India

Qualitative slide on Key points for Retailers to think about –

Does Online Cannibalize Offline?

22