landscape of internet retail in india by vikram sehgal
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TRANSCRIPT
Making Leaders Successful
Every Day
E-Commerce Landscape &
Opportunity in India
Vikram Sehgal
Vice President, Forrester Research
January, 2013
© 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)
© 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
© 2012 Forrester Research, Inc. Reproduction Prohibited
The Promise of e-commerce
5
© 2012 Forrester Research, Inc. Reproduction Prohibited
New eCommerce Markets Often Follow A Similar Path
6
© 2012 Forrester Research, Inc. Reproduction Prohibited
Countries Are At Different Phases
7
© 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
e-Commerce in India is in Early Stage of Development
© 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)
© 2012 Forrester Research, Inc. Reproduction Prohibited
Growth Drivers for E-Commerce
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• Online Tenure • Household Income
• Quality of Net Access
• Logistical Challenges
• Merchant Capitalization
• Merchant Push
• Payment Options
© 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)
© 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
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The evolution of digital drives complexity & Opportunity…
© 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/
Majority of U.S Retail Spending Influenced by the Web
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
…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)
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)
Source: March 11, 2011, “Welcome To The Era Of Agile Commerce” Forrester report
consum
e
become loyal
consider
Embrace touch points to maximize ROI
© 2012 Forrester Research, Inc. Reproduction Prohibited
Thank You
Vikram Sehgal
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© 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?
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