More tier III cities like Jhansi, Ranchi going online to shop

Even as consumers in metros are driving the traffic on e-commerce sites, tier II and III cities like Surat, Ranchi, Jhansi and Coimbatore are fast catching up.

According to leading online marketplace ShopClues, while 42% of its orders come from tier I cities like Delhi, Mumbai, Bangalore, etc, the remaining 58% is coming from tier II and III cities.

"Sales from tier III cities like Jhansi, Ranchi, Moradabad, Gorakhpur have gone up by an average 500% year-on-year, while for more developed cities like Kanpur and Lucknow it has grown by 30%," ShopClues Co-founder and CEO Sanjay Sethi told PTI.

Consumers in these cities have high interest in fashion, footwear, kids and toys, which shows lack of choices available to them locally, he added.

Besides, road-traffic congestion and absence of optimal shopping environments also means more customers are choosing to shop online, Sethi said.

"Another interesting trend is that tier II-III towns are getting exposure to e-shopping because of migrant population that comes to reside in the metros and sends back gifts to people in their home towns, especially around occasions like Raksha Bandhan, Diwali, etc," he added.

An indication of the trend is that during festival season ShopClues sees about 30% of the orders bearing a different delivery address than the one a customer uses for his/her regular shopping, he said.

ShopClues Corporate VP (Marketing and Merchandising) Radhika Aggarwal said: "62% of the visits from these cities are of new customers, which means steady month-on-month increase in overall customer base fuelled by greater Internet penetration and usage of Internet-enabled devices."

For ShopClues, Delhi NCR leads the top five cities by visitor traffic followed by Bangalore, Chennai, Mumbai and Lucknow, she added.

The top five emerging cities include Surat, Kanpur, Ranchi, Coimbatore and Vishakhapatnam, Aggarwal said.

Aided by rising user traffic from big cities as well as the medium and small towns, ShopClues expects to break even by January-March 2015 and and is eyeing revenues to the tune of Rs 1,000 crore by the 2014-15 fiscal.

Launched in November 2011, ShopClues.Com clocked revenue of Rs 50 crore in April 2012-March 2013.

Shopping online is fast catching up in India, which has about 200 million Internet users and is expected to overtake the US as the second largest Internet user base in the world by June 2014 with 243 million users.

The recently concluded four-day online shopping festival by technology giant Google, Great Online Shopping Festival, saw the number of visitors doubling to 2 million this year compared to last year's maiden edition.