Insights into India's changing online shopping trends & landscape

Indian shoppers have distinct needs and preferences regarding online purchases. But are online retailers able to anticipate these and cater to emerging trends? To find out, we asked 500 consumers in India about their experience with online shopping.

India's online shopper base is expected to be the 2nd largest globally by 2030 [1], growing to nearly 500-600 million online consumers. This widespread internet penetration has made Indian shoppers explore alternative channels for online purchases and one that stands out most is social media. In fact, a majority of shoppers use social media to start their search for new products or services. 

Technology and changing preferences are among the key factors Indian retailers should keep an eye on when shaping their long-term growth and eCommerce strategies. To help with this, Capterra surveyed 500 Indian online shoppers to understand their needs and behaviour patterns. Read along for key insights, and refer to the end of the article for the full methodology.

Consumers start their search with social media and online marketplaces

Social media platforms are no longer just for social connections and entertainment. They have evolved into valuable shopping destinations where consumers can explore and purchase products. In fact, a significant majority (69%) of surveyed consumers use social media platforms to start their search when shopping for new products or services. 

eCommerce marketplaces are also not far behind, with 67% of consumers choosing these platforms to start their online search. This suggests that consumers seek direct interaction with retailers and brands for a smoother shopping experience.

Interestingly, even though social media dominates as the entry point for consumers to start their online search, the majority (65%) still end up purchasing products through eCommerce marketplaces, followed by individual retailer websites or apps (52%). 

Numerous factors can contribute to why individuals initiate their search on social media platforms and conclude their purchases elsewhere. Social media is often a starting point for consumers to learn about a brand’s presence and discover products. It also gives them access to honest customer reviews and testimonials, therefore providing social proof and community interaction. However, a lot of social media shoppable posts come with links that take users to a specific product page on a retailer’s website or landing pages on eCommerce websites which is why purchases often happen on such portals. Retailers can instead set up shoppable links within social media platforms —such as ‘Shopping on Instagram’— so that users are not navigated away from the platform they are currently using, making it more convenient for them to complete purchases. [2]

Digital wallets have surpassed cards for online purchases

Digital wallets or mobile wallets have gained traction, especially since the advent of the unified payments interface (UPI). [3] More and more users are opting for the convenience of e-wallets over the hassle of carrying cash and cards. 

Our survey results are in line with this, with 74% saying they use digital wallets for online transactions, followed by 68% who use credit or debit cards. Surprisingly, as many as 49% said they still use bank transfers to make payments.

Digital wallets offer convenience to users as shoppers can add money to their wallets via different payment sources and accounts and use the wallet balance. As an online retailer, you can onboard various digital wallet providers like GPay, Paytm, PayPal, PhonePe etc., and ensure that you have the QR codes conveniently displayed to customers for easy scan payments. 

To do this, you should ensure you have the right technological infrastructure to accept payments from different e-wallet sources and payment gateways for a hassle-free checkout experience. As a result, businesses can differentiate themselves from their competitors and build long-term relationships with their customers.

Brand trust: the key factor in purchasing products or services online

So what drives users to a brand? The answer lies in trust! Among the most important factors when buying new products or services online in the past 12 months, 67% said they go for brands they trust the most. It is essential for businesses to build relationships with users based on trust, respect, and loyalty. 

This can be done by being transparent about product pricing, features, and policies so that they do not feel deceived at a later stage in their journey in case of a mismatch in expectations. If for any reason customers are not happy with their experience, the best approach may be to take responsibility and offer prompt solutions.

As consumers are buying new products and services online based on trust, one of the most significant forces fueling that trust is quality. Of the surveyed consumers who said they tend to purchase from the same brand:

• 83% said that they were motivated by the quality of products or services
• 65% of consumers said that they were motivated by price. 
• Other deciding factors are loyalty or rewards programs for 54%, and,
• Social/political issues are important for 37%

While quality is one of the biggest reasons for brand loyalty, it also pushes consumers to try out new brands and look for better quality if a product is not meeting expectations. To reinforce this, it’s interesting to note that in a price-sensitive nation, it’s not just the price (at 59%) that motivates consumers to try out new brands but other factors like quality (73%), online advertising (57%), and recommendations from family and friends (52%).

The quality of the product or service plays a critical role in its long-term success, reputation, and perception. Neglecting it can increase the risk of distrust among customers, increase consumer attrition, and, therefore, cause revenue loss.

Consumers trust eCommerce marketplaces and review websites for product reviews

Product reviews play a pivotal role in influencing purchase decisions. Consumers often read reviews to gain insights into product quality and compare available products. When it comes to review sources, 44% of surveyed consumers believe eCommerce marketplaces are the most trustworthy sources for product reviews, followed by review websites (43%), and social media platforms (33%).

However, consumers are not just keeping an eye on the positive chatter around your brand. 88% of the surveyed consumers feel that the number of negative reviews is a somewhat or very critical attribute when deciding to buy a product. While positive reviews highlight the benefits, strengths, and quality of products or services, they may often seem inauthentic or paid, especially if they come from a nameless or faceless account. 

In such cases, businesses must ensure that the reviews on their pages and accounts are trustworthy. Below are some tips for managing their reviews.

Key takeaways for retailers

Based on the findings of this survey, here are some of the insights for online businesses to keep in mind when catering to Indian shoppers:

• Ensure that you have a strong social media presence and that your offerings are also available on online marketplaces and brand websites to capitalise on online traffic.
• Quality is king. Offer high-quality products and services to customers in order to maintain a positive brand reputation.
• Encourage customers to post honest product reviews to increase brand trust and credibility. 

While these are only indicative of the current shopping trend among Indian consumers, this can very well change in the future due to evolving user preferences, sophisticated marketing techniques, enhancements in technology, and shifting customer loyalties. The second article in this series examines the role of technology in online shopping and in improving the consumer experience. We will also analyse users' search behaviours and other aspects of online product searches.