Ashish Hemrajani, the uber cool CEO of the online ticketing portal bookmyshow.com, bought his last book titled Delivering Happiness online. This was immediately after he ordered a Blackberry for his wife from a shopping portal. No surprises here since Hemrajani is an urban elite living in a metro (Mumbai). Besides, his tryst with online began way back in 1999 when he first launched his net company Bigtree Entertainment. Of course, bookmyshow in its current avatar was founded three years ago.
What is surprising, however, is that millions of customers from small towns are also logging in to shop online, irrespective of their income levels. So while you may be booking a film ticket at PVR Cinema in Delhi, someone is logging in to a hot deals portal to order a mixer-grinder.
Check the trajectory of some of the e-commerce sites to understand what we are consuming online. In 2007, Hemrajani sold 6,000 tickets online per month. Today his average monthly sale is 1 million tickets for films, music concerts, rock shows, theatre and even sports including the Indian Premier League.
The company is privately held and Hemrajani would not discuss the value of these transactions, but some of his customers spent Rs 50,000 online on tickets for an IPL match featuring Mumbai Indians.
It seems we are not only shopping more, but also spending more per transaction. Amanpreet Bajaj is a partner at Letsbuy.com, a gadgets e-commerce site selling everything from consumer durables to home appliances, mobiles to computers and their peripherals. Recently, a high-end LED TV from Samsung caught his customers’ fancy and enquiries poured in. Priced at above Rs 1 lakh, the TV sold well in areas it was not available in—tier II and tier III cities.
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Consumers of e-commerce sites are converging from Mumbai to Meerut and from Bangalore to Bhatinda. So it’s hardly a surprise that bookings for a new tablet from a major brand, tentatively priced at Rs 38,000, came from Ludhiana, Jalandhar, Nagpur, Ajmer, Alwar and Kanpur. This means that consumers were comfortable in making advance online payment just to book the tablet.
Clearly, small towns are driving e-commerce in India. The best deals marketplace site naaptol.com advertises heavily in print—mostly the widely circulated dailies, including Dainik Jagran,to reach out to consumers. His message has reached even remote villages in north India where the paper sells.
The villages are calling back. And how. Founder of naaptol.com claims 90% of his business comes from rural India. The company advertises its deals across product categories in newspapers and customers in the rural market are placing orders—not at the click of a mouse but by punching in the contact number given in the ad. He is calling from the mobile phone. There are about 267 million mobile subscribers in rural India.
E-commerce has made a subliminal entry into our lives—unmindful of geography or socio-economic category. That is not to say that it is new as online travel shopping is already a $1.2 billion business. However, suddenly much more stuff is selling online and major companies are viewing it as a new sales channel they need to service.
Poor accessibility to products is pushing consumers to shop online in small towns, while convenience is driving business in the larger cities. We, in the metros, are time poor. Besides, the discounts and freebies that these sites offer are also attractive. Some even offer EMI (equated monthly instalments) facility for high value products.
However, more than anything else, it is the feeling of empowerment that a consumer feels in shopping whenever he wants to. But the biggest push has come from cash-on-delivery service that most sites now offer. So consumers sans credit or debit cards can now buy online adding to the overall shopper base.
The cash option is drawing people unwilling to risk their credit card details online or those who worry about non-delivery of products after making an advance payment.
As a consequence, the profile of the consumer is also changing— for one, more women are now shopping online, especially in smaller towns.
Consumer traction is certainly building up although not all e-commerce sites are expected to survive despite the private equity money the sector is attracting. Surprisingly, founder of a best deals site, which has attracted 10 million customers in the last 18 months, says that out of 10 e-commerce sites, eight will fold up. But by then, the sector would have grown and expanded its consumer base, he adds.
Till then, enjoy your anytime shopping.
Shuchi Bansal is marketing and media editor with Mint. Comment at email@example.com