NEW DELHI, August 10: It is a classic case of small numbers driving big numbers � barely 5 per cent of urban Internet users in India drive 42 per cent of all online sales. No, things are not as bad as they may sound – two out of every five urban Internet user makes purchases online, and a quarter of the Internet users shop online regularly. Now for the big number � as many as 4.2 million people are regular consumers on the Net.
These and other key insights have emerged out of one of the largest online surveys conducted by JuxtConsult in April 2005 among Internet users in India. The survey sampled more than 30,000 users with the aim to unravel the identity of Net users along with their lifestyle choices. To estimate the penetration of Internet among urban Indians a telephonic survey spread across ten cities with over 3,000 participants was also conducted. JuxtConsult is a joint effort of Indicus Analytics and Webchutney.
The online market in India, the report says, is blossoming but long way off from taking off in a big way. The Internet is still being used more for searching than buying products and services. Though a noticeable proportion of Net users are also Net consumers essentially, at present only a small proportion is driving the online shopping momentum.
Back to the numbers. The 5 per cent users mentioned constitute the section of buyers who spend Rs 5,000 or more every month on the Net. In fact, two out of every three heavy spenders are netholics, those who spend three hours or more of their average day on the Internet. In other words, e-consumerism is being driven by only 5 per cent users most of whom are addicted to the Net. Of all those who buy online, only 25 per cent spend more than Rs 1,000 per month, while the rest bill less than that.
Then there are the sexual differences. While 43 per cent male users buy online, only 31 per cent urban female users do as much. Women tend to search more. Defying their more common attitude towards shopping, women are more guarded when it comes to the online market. Nevertheless, women shoppers do not think that buying online robs them of the fun of physical shopping any more than men do.
Shopping on the net may be limited, but it is widely used to search information related to buying products. Depending on the product type, 9 per cent to 25 per cent buy online, whereas 33 per cent to 47 per cent search the Net for product information. The biggest motivation for buying online is saving time. Some 32 per cent subscribe to this notion. Convenience of shopping '24X7' and home delivery are other reasons cited.
However, the concern over possible misuse of credit card or personal information is extremely significant among online buyers, with almost 55 per cent of them voicing apprehensions. Clearly, tackling and countering the issue of online safety figures as an imminent challenge for Net marketers.
The products bought most on the Web are books and compact discs – about one out of every four Internet user does so. The buying to searching ratio for these is also the highest at 62 per cent. Ironically, computer hardware and software, despite having the home advantage are among one of the least bought products online with only 13 per cent buying them. Its buying to searching ratio stands at 28 per cent.
While women are usually the more zealous shoppers in most economies, the report says, they form a rather small proportion of Internet users in India at present (only 15 per cent) and even fewer of them buy online. Therefore, marketers face the uphill task of encouraging more women to explore the web and incentivize them to shop online.
