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Impact of Social Media on Online Shopping Behaviour in India

  • August 2013
  • 53 pages
  • Frost & Sullivan
Report ID: 1619071

Summary

Table of Contents

Over 130 million Indians are connected to the Web via fixed and mobile broadband. This research insight studies the impact of social media on online shopping among Indians based on a consumer survey. This insight discusses the apparent benefits of social media and how it can be applied by enterprises to their advantage. It also presents an overview of future online retailing trends and discusses the difference between traditional and social media marketing.

Executive Summary

•This research insight studies the impact of social media on online shopping among Indians.
•Over X million Indians are connected to the Web via fixed and mobile broadband. The average net speed is around XMbps today, up byX% from 2011, according to Akamai Technologies.
•Though this is low compared to the rates in developed countries, such speed is enough for many consumer browsing applications such as email exchange, reading, and even online shopping and video watching.
•Internet usage is higher in urban India, especially among the youth and young adults. Frost & Sullivan finds that more than % of this connected demographic spends hours and more a day browsing for various needs including entertainment, networking, business, academics and shopping.
•Social media usage is highly active among young urban Indians. There are over X million registered Indians on Facebook and Xmillion on Linkedin and they log into these sites for networking.
•Empowered by the medium, consumers are visibly braver with their opinions and share views on anything including news, politics, products, movies, food, among others. Nearly % of young urban Indians spend more than hours on social media sites.
•In parallel, online shopping in India is accelerating; there are hundreds of portals offering a range of products in single or multiple categories for consumers.
•Apart from growing broadband ubiquity, consumers have the benefit of highly simplified user interface on many of these shopping websites.
•Good indexing and search tools, easy payment options, streamlined logistical infrastructure for shipping and- needless to say- a variety of products at a variety of prices- makes online retailing an attractive alternative for traditional shopping in the kirana stores, retail outlets as well as supermarkets.
•Frost & Sullivan finds that interestingly, consumers are increasingly relying on social media to make their purchases- either as informed choices, or through peer conditioning.
•This analysis finds that over X% of urban Indians are influenced by social media in their purchasing decisions. Companies will have to watch out for such consumer behaviour to chart their marketing strategies for the still evolving Internet medium.
•This insight discusses the apparent benefits of social media and how it can be applied by enterprises to their advantage. It also presents an overview of future online retailing trends.
•The forms of marketing for traditional platforms and social media are highly disparate. While the benefits of social media in terms of investment and returns appear visibly higher than incumbent methods of marketing and advertising, these cannot be taken for granted. Social media marketing has to be carefully and strategically implemented to see tangible results.

An Overview—The Social Media Advantage

Facebook, undoubtedly today the most popular social media site has over X million unique users globally. Facebook’s popularity transcends age, gender, cultures and geographies, despite disparity in Internet connectivity and speeds.

In 2012, though overX% of the Facebook population belonged to the age group of X to Xyears, the website is popular among all age groups, and that is what attracts a large number of advertisers to cater to every audience type- in turn helping it to generate revenue.

Facebook allows its subscribers to create and share user-generated content, engage in personal and communal activities such as gaming, express opinions through their “likes” and “dislikes,” and share details of their personal life with content such as text, photos, videos etc.

This, is social media- technically, the process of creation and exchange of user-generated content through the virtual world, largely connected via Internet and mobile networks.

Social media enables its users to freely express their views (in most cases) and voice their opinions to the rest of the world with much ease, and that remains the primary reason for its widespread use.

Social media is different from forms of traditional media in the following aspects:

Reach: The reachability of content circulated through social media is higher than traditional media. According to InternetWorldStats, over X% or Xbillion people globally are Internet users. In addition, we find that the world has over a billion connected devices. Content outreach can be global as well as local, while those of traditional media forms are limited in location as well as audience penetration.

Frequency: Frequency of content generation and access is higher on social media sites in comparison to traditional media forms such as print and television. In some cases it is almost instant- irrespective of whether it is a news event or a product launch or an application. End-users are sometimes perpetrators or engines of information and content themselves, thereby accelerating frequency in this medium.
For instance, on a social media site, a user may be subscribed to a news agency’s site. Hence, she/he is updated with news alerts frequently. On receiving something interesting or impactful, she/he can also share that content instantly to a larger audience across social media networks. Thus, social media allows information and content to ‘spread like wildfire.’

Sharing Opinion: Not only does social media allow one frequent access to content, but also allows users to exchange their thoughts instantly. This is a powerful feature. Traditional media forms limit the number and type of people who can receive one’s opinion; as well as the number of people who one can impact with the opinion. If chosen by media editors, publication can be modified, censored and delayed. However in social media, despite restrictions in certain countries, users have the flexibility of providing instant feedback, and expressing their thoughts and opinions. One can also make easily available their opinions in various forms such as illustrations, videos, audio, music, or even forming a club of like-minded people. While in the real world, each of these takes time to execute and disseminate, it is easy and quick using social media.
These, sometimes can spark communal acquiescence or communal disagreement- and provide fodder for actions- for a variety of causes- product sales, elections, social comment, or even a revolution!

Ease of Use: Social media has evolved to become simple and interesting today, than it ever was. Many adults who have never worked with social media sites during their younger days believe that these sites are facile due to user friendly interfaces over multiple media platforms. Ease of use is one of the top priorities for any enterprise who aims to conduct as or through a social media site or application.

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