E-comm deals to touch Rs 1180 cr this financial year

E-commerce transactions in India is slated to grow to around Rs 1,180 crore in 2005-06 and rise further to Rs 2,300 crore by next year.

The rise is buoyant on an increase in adoption of business strategies that revolve around the Internet, according to a survey by Internet & Online Association of India (IOAI).

About 55 per cent of the total visitors have adopted Internet as a shopping medium, resulting in an increase of total value of e-commerce activities from Rs 570 crore in 2004-05, IOAI, a non-profit organisation, said in the study.

Of the 55 per cent, 87 per cent shopped more than once and have been termed as `regular shoppers'.

Around 25 per cent of regular shoppers were in the 18-25 age group, 46 per cent in the 26-35 and 18 per cent in the 36-45 age group.

Online shoppers were mostly males, even a 15 per cent of females also made transaction over the web. Eighty three per cent users were educated with a Bachelor or Post Graduate degree, 54 per cent of online shoppers were at executive levels and 24 per cent were professionals or self-employed.

These factors represent a 15-million strong market by 2007-2008 and also indicates an assured spending power, the study said.

Around 62 per cent of the respondents shopped for over a year, 37 per cent in the last 12 months, 67 per cent as recently as three months and 27 per cent have shopped online over 10 times.

A total of 3,099 respondent's views were solicited. Of this, 55 per cent (1,716) shopped online and 87 per cent (1,493) shopped more than once, forming the base of the report. Of the total respondents, 76 per cent accessed Internet from their offices, 63 per cent from home and 24 per cent from cybercafes.

According to IOAI president Preeti Desai, "e-commerce is coming of age in India. Changing lifestyles and shopping habits, a similar metro, non-metro consumption of media and Internet and multiple Internet access points will propel online transactions to Rs 2,300 crore in 2006-2007 from the projected Rs 1180 in 2005-2006."

From a consumers' perspective it allows greater access (hence the high response rate by tier-II cities) to markets and an opportunity to make informed decisions on purchases, she said.

Of the city and product preference Mumbai ranked first with a 24 per cent for every category (except Jewellery), followed by Delhi at 19 per cent (in accessories, apparel, gifts, home appliances categories and has piped Mumbai to number one position in jewellery).

Chennai ranked third with a 7 per cent for railway and airline tickets, magazines, home tools, toys, jewellery, beauty products and sporting goods

Bangalore at 6 per cent was at third position for books, electronics, accessories, apparel, gifts, computer peripherals, movies, hotel booking, home appliances, movie tickets, health and fitness products and apparel gift certificates.

Kolkata also ranks three with a 5 per cent sales in online music and is ranked for in movies and music categories. Hyderabad and Secunderabad surged to fourth rank for movie tickets, pushing chennai to fifth position.

Books were the most sought after commodity on the web, with 41 per cent of the respondents opting for it, followed by electronic gadgets (40 per cent), railway tickets (39 per cent), accessories apparel (36 per cent), apparel (36 per cent), gifts (35 per cent), computer and peripherals (33 per cent), airline tickets (29 per cent), music (24 per cent), movies (21 per cent), hotel rooms (20 per cent), magazine (19 per cent), home tools and products (16 per cent).

Home appliances (16 per cent), toys (16 per cent), jewellery (15 per cent), movie tickets (15 per cent), beauty products (12 per cent), health and fitness products (12 per cent), apparel gift certificates (10 per cent) and sporting goods (7 per cent).

The research, which tracked Internet user's proclivity for shopping online, was conducted in association with Cross Tab Marketing Services.