Online shopping fast catching up in India

E-tailing comes with problems that are quite identical to real world retail. Indians purchase goods through Internet, which are otherwise not available in brick-and-mortar stores. But what will they do if the goods go out of stock even in the online malls? In other words, inventory is a major hurdle while shopping online.

According to Ramu Prasad, a Hyderabad based shopper: “Lack of proper inventory management methods result in back-orders and delays in shipments. I have had an experience where it took almost one whole month to process and order. I placed an order for a couple of books, which, unfortunately, were out of stock, and the seller took about a month to get them ... All I could do was wait.”

The prominent factor that needs to be addressed has more to do with consumer mindset than a change in business model. Lots of online Indian malls believe that the biggest barrier is lack of trust. Point to be noted here is that however advanced the markets may be customers are still skeptical about online transactions.

“Very few Indians are aware of the fact that there is more security when it comes to purchasing online. When you purchase offline, there’s a possibility that someone misuses your credit card. But when it comes to online shopping, all your personal information, like user name, passwords, credit card number and transaction history, is encrypted so that they cannot be read as it travels over the Internet,” pointed out Suvrokamal Dutta, financial expert based at India.
Indian market where online shopping is still considered an unsafe and unreliable option, StoreGuru.com, Web 18’s flagship e-tail Web site, reassures its clients by claiming to give the safest payment gateway among all e-commerce sites. According to company sources, the website directs to an encrypted payment gateway of the bank itself, which is pretty secure.

According to recent survey, Indians are the third biggest credit card users globally for online purchases. In the survey, more than 84 per cent of online shoppers from India said they have used credit cards for such transactions. Other modes of payment include debit cards, cheques and demand drafts.

One peculiar thing about Indians is that they would want to pay only on delivery. “If I have a choice of paying the money when I have the product delivered, I feel I would be hooked,” pointed out Ramya Singhal, online shopper. However, some of them quote the fear of addiction as one of the factors that stops them from purchasing online.

“I restrict myself from buying online as I think online shopping might lead to impulsive purchases,” said Neelam Vasnani. But e-store owners are of the opinion that such addiction may not be Internet-driven. The pivotal factor here us that it is not the shopper’s mindset that influences or inhibits the growth of e-commerce; it is more the lack of understanding of customer requirements by these e-stores.

In India, electronics and gadgets are among the most sought after products that people tend to buy online. For example, IndiaPlaza.in, last year saw a drastic drift from books and music to gadgets and electronic items. Not so long ago, 25 per cent of the India Plaza sales accounted for books and 15 per cent for electronics. But, at this moment of time, India Plaza market for electronics has increased significantly. In terms of statistics, around 60 per cent of their revenue at present is from gadgets.

With the increasing PC and Internet penetration in India, which is playing a prominent part in accelerating the share of e-commerce, it would not be wrong to predict that the mobile phone could well define the exponential growth in the near future. According to experts, mobile phone can function as a catalyst for online shopping and can fuel its growth.
Mobile commerce wherein a mobile phone is used to make payments is catching on in India. As a matter of fact, Mobile commerce is where e-commerce was few years ago. One can expect higher growth rates and better reach in the coming years. With the sudden boom in online shopping, plenty of physical retailers in India are moving to the Internet, which might sound a threat to online malls.