It’s not the ultra-rich but the up-and-coming youngsters who will drive India’s e-commerce boom. A report by Redseer says Indian consumers who have an annual income of Rs 2.5-10 lakh will play a big role in making e-commerce a $300-billion opportunity by the end of this decade. They could potentially add over $110 billion to the gross merchandise value of e-commerce.
The rise of mass consumers
As per the report, there are three categories of e-commerce shoppers — affluent, mass and strivers.
Affluent consumers are the ones who make more than Rs 10 lakh a year, while mass consumers earn between Rs 2.5-10 lakh and strivers have an annual income of less than Rs 2.5 lakh.
THE E-COMMERCE SHOPPERS
| Affluent Consumers | < Rs 10 lakh income p.a. |
| Mass Consumers | -Rs 2.5-10 lakh income p.a. |
| Strivers | > Rs 2.5 lakh income p.a. |
Redseer Consumer Survey
Mass consumers constitute more than half of 319 million Indian households, while the affluent constitute around 15 percent and strivers constitute about 33 percent.
The report says mass consumers are value-conscious. Sixty percent of mass consumers surveyed said they would even buy unbranded products, even in categories like home and kitchen or fashion, as long as they are available for the right value.
Meanwhile, affluent consumers prefer premium products across categories like smartphones, beauty and personal care and are also open to buying organic products and smart luggage, which usually cost more. Strivers, on the other hand, mostly stick to essentials.
How online shopping patterns vary
For mass consumers, 75 percent of whom are Gen Z and Mmillennials, the internet is becoming an integral part of their purchasing journey. Sixty five percent of mass consumers, surveyed by Redseer, research products online, 22 percent buy products online and 73 percent use digital payments for e-commerce purchases.
HOW MASS CONSUMERS USE INTERNET WHILE BUYING
| Discovery | 75% |
| Research | 65% |
| Purchase | 22% |
| Payment for e-comm purchases | 73% |
Redseer Consumer Survey
Even though the penetration for digital shopping remains low for the category, 70 percent of mass consumers surveyed said the frequency with which they buy products online has increased in the past year, especially when it comes to apparel, health and wellness and food and groceries.
The report says this indicates headroom for growth. E-commerce platforms already have a high penetration in the affluent consumer category, but when it comes to big-ticket purchases, the rich prefer shopping offline. However, the report highlights that strivers depend on unorganised local markets to buy products.
Why mass consumers will be the driver
RedSeer’s survey found that mass consumers shop online because e-commerce websites offer better prices and discounts, easy returns and refunds, and a wide range of options. These consumers are also tech-savvy and open to trying out new affordable products that e-commerce platforms sell.
Gen-Z reshaping online shopping
Social media is also driving Gen Z, who are largely mass consumers, to online shopping, as per the report. The digital-savvy generation knows how to compare products and prices using information available on social media before narrowing down on an option.
The rise of online content and short-format videos have enabled this generation to share good deals and genuine feedback with each other.
As of 2022, over 65 million Indian households were transacting on e-commerce platforms monthly. The report expects this number to nearly double by 2030, with mass consumers adding more than 80 percent to the incremental transacting households.
(Edited by : Shoma Bhattacharjee)
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Supreme Court says it may consider interim bail for Arvind Kejriwal due to ongoing Lok Sabha polls
May 3, 2024 4:57 PM
10% discount on fare on Mumbai Metro lines 2 and 7A on May 20
May 3, 2024 2:40 PM