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Indian and Chinese shoppers pushing e-commerce growth

Update On :08 May 2017

Indian and Chinese shoppers pushing e-commerce growth

Global e-commerce is forecast to double to $4.1 trillion by 2020, from $1.9 trillion in 2016, as consumers in populous countries such as India and China prefer to shop online to avoid crowded malls, a KPMG survey showed on Friday.

The share of e-commerce in total sales will rise to 14.6% by 2020 from 8.7% in 2016. Consumers in China, India and Singapore, say crowd avoidance was a top motivator to shop online.

In India, the government has been pushing citizens to go for digital transactions as part of efforts to move towards a less cash economy.

With 22.1 transactions per person per year, Asia tops the chart of online buys followed by North America (19%), Europe (18.4%) and Australia (16.1%).

Books, music, electronic gadgets, computers and women apparel are among the top five products purchased online, said the Global Online Consumer report for 2017. In case of India, telecom products and men’s footwear were also among the top five items purchased.

“Advances in technology, logistics, payments and trust coupled with increasing internet and mobile access and consumer demand for convenience have created a $1.9 trillion global online shopping arena, where millions of consumers no longer ‘go’ shopping, but literally are shopping at every moment and everywhere,” said the KPMG survey conducted on 18,430 consumers in 51 countries.

Global e-tailers such as Amazon, Alibaba and Taobao dominate the ecommerce space. “Their dominance is particularly evident in China and India where over 80% of online purchases were from e-tailers as well as in Japan (69%), Italy (68%) and South Africa (65%). The share for e-tailers in these countries is far above the global average of 50%,” the report said.

In Asia, on the other hand, brand was typically more important than price, particularly in China and India, where brand reputation was cited twice as often as price (31% versus 15%). Consumers in Australia, New Zealand, Canada, France, Belgium and South Africa were most likely to be influenced by price or promotions. In these countries, more than 38% of consumers said price and promotions were the factors that drove their most recent product choice.

Globally, credit cards are the most used payment method, more common than PayPal and debit cards. India is the Asian exception, where consumers prefer to pay cash on delivery (COD) or by debit card, rather than on credit.

“However, there has been an increase in use of credit cards, debit cards and e-wallets in the past one and a half years since the government announced the demonetisation move, a big push to curb black money in India,” says Rajat Wahi, head of consumer and retail at KPMG India.

Asian consumers, especially in China, Japan, Hong Kong and India, were also more likely to base their final product decision on online reviews.

Generational trends indicate an increasing use of social media sites such as Facebook, WhatsApp, Instagram, blogs and Twitter for posting and reviewing feedback. Although Facebook is the most common platform in nearly all regions, it is by far the preferred choice in North America and Australia. Instagram and Twitter are predominantly North American channels, and WhatsApp is particularly popular in Hong Kong, India, Africa, and Latin America. In China, where many US-based social media channels are not available, WeChat dominates, although its use is virtually exclusive to that country.

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