Monday 24 August 2015

Smaller cities, towns go big on mobile shopping

PUNE: Sandip Ghadge and his friends have already decided what to gift their sisters this Rakshabandhan. And no, the purchases aren't going to be made from the market in Satara where they live. Sandip, for one, is keen on buying his sister a new cell phone and will be placing the order on a well-known e-commerce app from his own smartphone. 

Like Sandip, many from small cities and towns are taking to shopping online, swelling the business of the ever-increasing number of e-commerce firms across the country. These firms, in turn, have realized that a bulk of their orders from tier II and III cities and the rural areas are booked through cell phones. 

"In Maharashtra, as much as 40% of our business comes from smaller cities," said a spokesperson for Flipkart, one of the major players in the e-commerce business. Vivek Mathur, chief executive officer of Pune-based online gift portal, said, "About 30% of our orders are from cities other than the top 20 cities in the country. In Maharashtra, 30% of our orders are from places other than Mumbai and Pune." Vikas Purohit, head (fashion), Amazon India, said the company currently receives more than half their orders from cities other than metros. 

The overwhelming response from the country's hinterland has prompted e-commerce firms to shift focus, realign their business models and modify return policies. 

The proliferation of cell phones and more competition in the e-commerce sphere have made quality, varied selection available at heavily discounted prices. Easy delivery and doorstep return options fuel the rapidly-growing consumer base. Some analysts say that online shopping is growing at a much faster pace in villages than in big cities. 

Amazon India has tapped the country's oldest and most reliable distribution network — India Post — to deliver goods to remote places. "Through India Post's extensive network, we are able to service over 19,000 pin codes through 1,40,000 post offices across 35 states and Union territories. For example, we even deliver to pin code 790002, which is for a remote place called Balemu in West Kameng district of Arunachal Pradesh," said Purohit. 

The most popular items bought online from the lesser-talked about corners of the country are electronics, casual clothes, shoes and showpieces. Apart from these, niche online portals offering items like baby products and accessories are also finding many takers. 

Supam Maheshwari, chief executive officer and founder of Pune-based, said that while Maharashtra's tier III and IV cities make up for almost 40% of their business, as many as 65% orders from tier III cities are for cell phones. 

A recent report of the Associated Chamber of Commerce & Industry of India (Assocham) states that shopping on cell phones may cross the Rs 40 million mark from the current Rs 30 million level. The women-focused share of the e-commerce market will increase from 26% in 2013 to 35% in 2016, the joint study of Assocham and Grant Thornton highlighted. It has been observed that people in the 15-34 years age group are the most active online buyers. "Peer pressure, rising aspirations with career growth, and fashion trends encourage this segment to shop more than anybody else," the report states. 

The report explains that India's current dynamics are similar to what existed in China then - growing broadband penetration, acceptance of online marketplaces and lack of physical retail infrastructure in many places.

No comments:

Post a Comment