Online channels are playing an important role in connecting with consumers of unexplored markets. The journey of online spending that started with an increasing number of buyers of travel and holiday plans in the last decade has now extended to an increase in spends on household appliances and luxury products. While segments like apparel and luxury products have registered unprecedented growth in 2015, others like jewellery, electronic appliances and hardware products have shown promising growth trends as well. Indian consumers are showing greater appetite to transact online, fuelling the e-commerce boom.
In spite of the digital revolution, ever-growing online buying, and huge potential for online stores in future, there seems certain challenges in online buying.
To take advantage of this growing opportunity, retailers must ensure they are addressing the needs of potential customers, which include attractive pricing and the convenience of ordering online. The rapid growth of online coupon sites suggests that consumers in India are looking for deals, highlighting the need for online retailers to adopt effective marketing and pricing strategies for their goods. Online shopping initiatives are increasingly luring working professionals, women, and children.
However, this growth story is not devoid of challenges that the industry is confronted with, both global and local. As more global players enter the e-commerce space, lack of common taxation rules can also hinder growth in future. “In the online shopping industry, especially, the need of the hour is a uniform Goods and Services Tax (GST) across the country. Currently, inter-state movements of products often pose a problem, given the different taxation rates. This would need to be resolved in order to extend the reach and improve the e-commerce experience.
On the local front, online shopping predominantly remains a practice of urban and middle-class consumers. Though consumers in small towns have started using the internet actively, conversion from visitors to shoppers would take some time. Then there is logistical and supply constraint for retailers. While online shopping is expected to find some share in smaller Indian towns too, increasing the supply of products and lack of logistics like warehouses can be a challenge for retailers. One of the bigger challenges being faced by the online shopping industry is the fragmented back-end. Greater attention from the government and private entities, more investment, and the entry of serious players would be needed to create a better structure for payments and logistical infrastructure.
For citing this article use:
- Sreekanth, C. V. V. D. (2016). Factors determining the online buying behaviour a study with special reference to consumers in Andhra Pradesh India.