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Set to become a $40 billion opportunity by 2030, the value e-commerce segment in India presents immense potential. Players like Snapdeal lead from the front when it comes to cashing in on this opportunity.

Did you know that the number of online shoppers in India is likely to grow to 22 crore by 2025? In 2017, there were just about 8 crore online shoppers in India - indicating a huge, 75% growth in eight years! According to some other market estimates, the total number of online shoppers in India is likely to reach 35 crore by 2025!

However, the bigger story is that of changing consumer demographics. According to the Statista.com data, in 2017, shoppers from metro and tier 1 cities constituted 68.75% of all online shoppers. But by 2025, by controlling 56.82% share, online shoppers from the tier-2 and smaller towns will have outnumbered those from the metro and tier-1 towns!

The changing buyer profile

According to a report by BCG and RAI, there are about 28.6 crore households in India. Of these, 18.6 crore or 65.03% are those with an average annual gross income of 1,50,000 to 10,00,000. These consumers can be termed value-conscious due to the importance they attach to the value for money they get.

Traditionally, India’s e-commerce space has been defined by well-known and big brands, which explains why metro and tier-1 shoppers have led this space for so long. However, a recent report by Kearney said, households earning less than 10 lakh per annum account for nearly 70% of India’s non-food, value-driven retail demand. Increasing internet adoption among these value-conscious buyers and eroding resistance to online shopping combined with their unique shopping needs is shaping the growth of value e-commerce opportunities in India.

Value e-commerce: A large opportunity

The rising importance of online value buyers has led to the creation of a large new segment of value e-commerce. According to Kearney’s latest research, the value e-commerce market in India is set to show a 10x growth reaching $40 billion by 2030 from the current level of $4 billion.

Gone is the yesteryears’ need to touch and feel. The rapid adoption of digital payment methods, smartphones and cheaper data have been other

enablers of the Indian value e-commerce boom.

The value shoppers’ mindset

Certain behavioural traits differentiate value consumers from luxury buyers, these include:

Not brand-driven: Guided by their budgets, value-conscious consumers buy good quality products. A majority of the consumers are ready to try out different brands.

Aspirational buying: The majority of value lifestyle customers especially in the 18 to 35 years age group are aspirational and seek out lifestyle things that will improve their self-image, as well as products that will be desirable to others.

Bargain hunting: value-conscious shoppers constantly search for the best deals before spending a rupee.

Snapdeal: The value e-commerce leader

The Kearney Report mentions Snapdeal as an early mover in value e-commerce. Snapdeal has grown quickly in tier-2+ markets because of its relevant and curated assortment of lifestyle products at competitive prices.

Snapdeal recently shared that the appeal of products priced between 200 and 600 was driving the growth of the fashion sector on its platform.

 

Find out what middle income adults with families seek while making purchases
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Find out what middle income adults with families seek while making purchases
Know more about what financially dependent young adults look out for when they shop
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Know more about what financially dependent young adults look out for when they shop
Learn more about purchase priorities of financially independent young earners
View Full Image
Learn more about purchase priorities of financially independent young earners

 

Snapdeal’s effective strategies such as sharp and relevant price-points, continuous quality improvement, low-cost fulfillment (e.g., free deliveries with no minimum order value), and personalised recommendations are working in its favour.

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