As a consumer-facing startup, where should you invest your marketing rupees? Google AdWords? Social media marketing? TV ads? WhatsApp? SMS blasts? Video?
You will say ‘video’ if you read the How India Shops Online report prepared by Arpan Sheth and Shyam Unnikrishnan, partners at Bain & Company. The report brings out some fantastic insights, and it is a must-read for all digital economy entrepreneurs out there.
I found this report as part of some research I was doing for a presentation I made to the budding entrepreneurs of the iHub Gujarat incubator. Based out of Ahmedabad, iHub is envisioned to be a center for all startups stakeholders to develop end-to-end innovation and entrepreneurial ecosystem.
Here are excerpts from the report that stood out for me:
- 1 billion internet users by 2030.
- The Indian e-retail market is primed to reach nearly 300 to 350 million shoppers over the next five years.
- Online Gross Merchandise Value (GMV) [will grow] to $100 to 120 billion by 2025.
- E-retail has already democratized the shopping landscape, with access to more than 95% of India’s pin-codes
- Online shoppers in tier-2 and smaller towns make up nearly half of all shoppers and contribute to three out of every five orders for leading e-retail platforms.
- These customers from tier-2 and smaller towns buy similar categories of products as customers from metro cities or tier-1 towns with only a marginal difference in average selling price.
- Consumer engagement with online platforms has increased but a visitor spends less than nine minutes per visit on an e-retail platform
- Online shoppers browse more than 20 product pages before making a purchase—for some categories like mobiles and women’s ethnic wear, consumers browse about 50–60 product pages before purchasing one.
- The Indian vernacular-language internet user base is expected to reach more than 500 million users by 2021 (vs. 200 million English-speaking internet user base in India)
- Video content consumption in tier-2 and smaller towns in India grew more than four times just in the last year.
- Top e-retail companies have started to develop ecosystems that combine their core e-retail business with sticky customer services such as video streaming, gaming, booking and payments in a single platform or application.
- China had similar levels of shopper penetration as India, eight years ago, which grew from 8% to 40% triggered by a drop in data prices and improvement in e-retail infrastructure.
- 97% postal codes in India ordered at least 1 item online in the last year
-8,000 units sold daily
-Zero spend on traditional media
-1.5x profit margin in comparison to Blaupunkt, Portronics Digital
-16% market share within 2 years
- 1 in 2 visitors browse images versus only 1 in 15 read detailed descriptions.
- Men account for 45% of shoppers in personal care
- Video consumption in tier-2 and smaller towns in India grew 4x in the last year.
- Google India saw 270% year on year growth in voice search
- Video content consumption in Indian tier-2 cities grew 4.3x vs. last year
You can access this report from the Bain & Company website.