Here's how India's e-shopping has changed

Two years ago when Flipkart, the country's largest web retailer kicked off its first flagship Big Billion Day sale, things didn't quite go as per plan. The e-tailer wasn't able to handle the unprecedented traffic and its founders were left apologising to disgruntled shoppers for the snafus. A lot has changed since then, not only for Flipkart and for all e-commerce players, but also in the way India shops online.Beyond the intense fight for capturing market share emblematic of the e-commerce sector, which reaches fever pitch this time of the year, what's starting to emerge is a breed of seasoned shoppers who is as comfortable buying an expensive smart TV as ordering their dal-detergent online.

Small-Town India Becomes Big Online
If we were to believe data from companies, online retail's march into smaller Indian cities seemed to have finally made progress this year after many attempts to amp up business from these towns. What'll be interesting to watch is if these numbers sustain. Amit Agarwal, country head of Amazon India, says among the 15 million units it sold during its `Great Indian Festival', orders came from 90% of India's pin codes. The number of new customers increased five-fold over last Diwali with 70% of new shoppers coming from tier II and tier III towns, he adds. Overall, 65% of Amazon's orders come from towns categorized as tier II (population of one million) and below. Rival Flipkart says sales from tier II and below cities went up to 42% from 34% in the past one year.

Even as e-tailers tout their strides beyond the big cities, estimates say the number of online buyers remained at around 68 million in 2016 and majority of them came from metros. "It's true that a big chunk of new customers are from tier II and tier III but their ticket sizes and frequency of purchases will take some time to increase as most of them are only shopping because of discounts," says Satish Meena, forecast analyst at Forrester Research.

A good part of the sales during the festive season typically comes from incremental wallet share of existing buyers. The market expansion due to new shoppers is still limited, he says.

But not for want of trying. To boost the e-tailing market which has stuttered in the past year, having remained at $10 billion in size after galloping at 400% growth the previous year, companies brought in attractive EMI and exchange schemes on electronics and white goods. Membership programmes like Amazon Prime were aimed at locking in customers on to online platforms.

Flipkart's co-founder & CEO Binny Bansal says the average order size is up 20% despite discounts compared to regular days. The e-tailer says it also brought in 1.5 million new customers this year versus one million that came on board last year even as cash-on-delivery (COD) orders came down from 70% to 60% of all Big Billion Day transactions.The decline in COD shows that more Indians now trust online platforms to deliver the goods.

Size And Price No Bar For Buyers
Mobile phones still account for a huge chunk of sales but there's been a palpable focus on high-ticket categories like white goods and large appliances. Devita Saraf, CEO of Vu Television, a brand which sells more than 60% of its products online at an average price point of Rs 25,000, says there's an emergence of a new kind of customer who is online-first in their shopping behaviour. She says her brand was among the top sellers on Flipkart during the five-day sale. Amazon was seen pushing daily consumables heavily, a first during the sale season which is defined by deals on mobiles and electronics. During the five-day sale consumers were looking for deals on everyday use products like detergents, diapers, grocery and household products indicating that they did not forget their everyday purchases while shopping for other deals, the company says.

Less Discounting, More Sales?
Post March this year, most e-tailers reduced promotional campaigns after the Indian government introduced new policy guidelines which outlawed online marketplaces from offering discounts directly. While companies did eventually find ways to get around the re gulation, this year's sales haven't offered the kind of deep discounting as previous years. But despite that, volumes are up. Consumers are getting used to buying online more with over 20-25% of users now making a purchase once in two months, says Sahil Barua, co-founder and CEO of e-commerce logistics startup Delhivery .

Radhika Aggarwal, co-founder and CBO, ShopClues, sees this as a sign of the Indian ecommerce market maturing. "E-commerce was built on discounts to change consumer behaviour as there were no other hooks at the time.But now people wait for the sales because of the kind of selection of products they find online," she says. What happens post the sale-month spike will be decisive in understanding if the overall market has grown spawning new buyers or the growth was just seasonal.