0203 696 0980

How to reach Indian online shoppers

Channel choice

Marketplace

As we saw in section 2, more than 90% of relevant ecommerce in India takes place on marketplaces, primarily Flipkart, Snapdeal and Amazon. Moreover, as we saw in section 3, recent regulatory changes are likely to make these players hungry for additional sellers who will add volume, not to mention credibility, by selling well-known brands.

Neither Snapdeal nor Flipkart’s main site currently offer any of the brand-image-protecting features that are available on many other marketplaces. Both remain essentially C2C sites in terms of presentation, and the ownership of the relationship to the endconsumer is skewed away from the seller and towards the marketplace.

However, Flipkart owns and operates two marketplaces – Jabong and Myntra – which specifically target (generally younger and wealthier) fashion consumers. These are already seeing the potential in offering a more brand-conscious, more B2C-like, experience. Brands are reciprocating by starting to list their products on these sites. Major British fashion brands already actively selling include New Look, Dorothy Perkins and Next on Myntra, while Missguided are active on Jabong (Figure 18).

Other international brands, such as Mango, are already actively using marketplaces as their primary route into India, and have seen spectacular growth. International brand sales on the platform grew 145% between 2016-17, and are forecast to grow 80% in the next year. This growth is a further contributor to driving the marketplaces to offer further brand-friendly features, including (in Myntra’s case) international-brand centric areas of the site planned for later this year.

Amazon, meanwhile, remains Amazon. It will be interesting to see if they feel driven towards a more TMall-like model in India, sacrificing some consumerownership and brand-visibility in exchange for sales growth. Given recent regulatory changes (see the FDI section), this seems a quite likely direction of travel.

Note that all sellers on Indian marketplaces are required to have a locally registered Indian entity. You cannot become a marketplace seller without one; it may therefore be necessary to seek the services of an appropriately registered partner

Local site?

Unlike for most countries, a local site may well not be the best option, and may be technically illegal, unless you already source a significant proportion of your range in India. In practice this tends to restrict to those fashion/footwear brands with manufacturing facilities in India.

Nike, for example, has a local Indian site. Spend a few minutes browsing, and you’ll see that their hearts don’t really seem to be quite in it. Customer service is only open 5 days x 8 hours, for example, and shipping times are based on a warehouse only picking Monday-Friday with even the fastest express delivery option requiring a further 2 days.

Cross-border

Despite these obstacles, Indian consumers in addressable demographics still want to buy international brands and products online. Given the challenges of getting them from local websites for the simple reason that they often just aren’t listed there, it is unsurprising that Indian online shoppers make extensive use of cross-border purchasing (Figure 19):

Not quite at the startling levels of other markets very poorly served by local ecommerce, such as Canada or Ireland, but still higher than China, the UK or US, for example. Moreover, predicted growth in 2016 of cross-border, based on consumer-survey data, was a very healthy 75%.

So for India, cross-border could be a first route to market to its consumers; it may well remain the best option, even at scale. However as the marketplaces continue to develop their B2C propositions to be more brand-friendly, this could be expected to change.

Marketing to Indians

Indians may be keen to purchase overseas brands, but you still need to keep reminding them to do so, and to choose you rather than a competitor. So even though a local transactional website may not be happening very soon, a local online marketing presence is still essential.

Device

Mobile: 87% of broadband subscriptions are through mobile, and non-broadband users don’t really shop online. End of discussion? Well almost. Many of the remaining 13% are professionals using PCs in their workplace, and such users are amongst those most likely to make cross-border purchases.

So although your marketing should very definitely be mobile-first, it hasn’t quite reached the mobile-exclusive stage yet.

Social Media Channels

The profile of social media usage in India is likely to be broadly familiar (Figure 20). Facebook is up there as the top channel, as you might expect, and given the prevalence of English language skills amongst likely target consumers, your existing presence might well extend with very little effort.

The slightly surprising reach of Google+ is partly a legacy of the now defunct Orkut, once the dominant social media application in India and owned by Google. Unlike most countries, Indian marketeers have been actively investing in developing their Google+ presence.

The other unfamiliar presence is that of the Chinese giant WeChat; loosely speaking WeChat combines every other possible social application you’ve ever used into a single super-convenient application, with better conversion rates for online purchasing. WeChat’s owners are pursuing aggressive expansion in many Asian countries, and see India as a prime opportunity.

This interest from China should act as a broader call-to-action for those considering China as a cross-border target: the Chinese are coming, spearheaded not only by Tencent’s WeChat, but by Alibaba’s Ali-Express.

Those considering using Social Media as their main, or only, online marketing channel in India should beware of (or possibly exploit!) its extremely skewed demographics (Figure 21). Three-quarters of all active users are aged under 30, and the majority are male.

Indians, and especially the younger fashion conscious consumers most likely to purchase online, are also highly responsive to influencer marketing, and the marketplaces in particular invest actively in this space.

Other digital marketing channels: email and SMS

Indian companies themselves don’t see social as their most important channel (Figure 22). Remember that you most likely won’t have a transactional website: however you probably still need a website presence, and so that channel in fact ranks as top priority.

Go back a few years, and SMS would almost certainly have been the next option. Stricter regulation, combined with evasive action taken by mobile users, has resulted in a return to email as the next preferred channel. A rather startling 29% of retailers send daily emails, according to one survey. Unsurprisingly rising use of spam filters, generally rather fluid personal email addresses, and lack of consumer consent are growing issues.

Search and Content

The search engine situation in India is extremely simple: Google has a 96% market share. Your content should primarily be in English; none of the top Indian ecommerce sites has a non-English option.

There is a growing trend towards offering vernacular content (45% of content in 2013, forecast to rise to 60% by 2018), but there are 22 officially recognised languages. In practice, generating content in Hindi (with 422 million speakers) and possibly Marathi (another 73 million, and the language of the commercial capital Mumbai), might be an interesting possibility if you really want to aggressively target Indian customers. The challenge is that they will almost certainly still need to complete any online transaction in English. However given the particular demographics of Indian internet usage and also education, if you are targeting certain customer-segments especially women, you might contemplate vernacular marketing with the expectation that the final purchase will be made by someone else with English language competence.

Google India itself offers search in nine vernacular languages in addition to English (Figure 23): Hindi, Bengali, Kannada, Marathi, Gujarati, Malayalam, Telugu, Punjabi and Tamil, i.e. approximately 85% coverage and including all major urban areas.

Summary

• There is a difficult channel choice to make when targeting Indians via ecommerce.

   »» The dominant online marketplaces offer weak control of brand combined with strong disintermediation between seller and buyer; a less than ideal pairing. However recent regulatory changes may lead to them developing features more sympathetic to brands

   »» Setting up an own website on an Indian domain is subject to difficult, and possibly prohibitive, regulations

   »» Cross-border may be a good option in the short term, but the as the marketplaces increase in sophistication, they may prove a more sustainable long term bet

• Cross-border ecommerce has been used by 36% of Indians who buy online. It was forecast to grow 75% in 2016

• Marketing should be mobile first; 87% of relevant internet access is via mobile

• The social media landscape is generally familiar: Facebook tops the charts for example

   »» Demographics of usage are biased towards the young, and very strongly skewed towards males

   »» The Chinese giant WeChat is making successful inroads into India, backed by aggressive marketing. It may be an interesting horse to back for the medium-term

• Search is totally dominated by Google: they have an 96% share of the market

• Google is driving efforts to make vernacular content accessible: they offer 9 languages in addition to English, covering around 85% of the population and all
 major urban areas of interest to retailers

   »» Around 45% of Indian internet content was published in vernacular languages in 2013, forecast to rise to 60% by 2018

   »» Investing in content in Hindi and Marathi might be a plausible starting point

 

 

 

India's demographics

India's retail landscape

Connectivity and internet usage in India

India's legal framework

Payment methods in India

Logistics in India

Data Summit 2019 scroll banner