Over 54 million stopped buying online in last 12 months, finds study

The report says there is a potential to unlock over USD 50 billion in online commerce in India by driving awareness, usage, and transactions among the current and next set of internet users and shoppers.

By BusinessToday.In  
Tuesday, August 21, 2018

About 50 millions shoppers in India have stopped online shopping in the last one year - a move that has cost the e-commerce industry around USD 50 billion. According to a report conducted by Google, Bain and Company, and Omidyar Network, about 40 million new internet users are added to online transactions per year, but only 40 per cent of India's 390 million internet users transact online.

"About 54 million customers have stopped online transactions after first purchase," the report noted.

The report further observed that there was potential to unlock over USD 50 billion in online commerce in India by driving awareness, usage, and transactions among the current and next set of internet users and shoppers. "This will be driven by more than 500 million Indians who will constitute the next wave of online consumers. However, these consumers experience significant barriers in accessing the internet," it said.

The report's findings show that data usage on mobile is at par with developed markets - 8 GB per month/ per subscriber. To bring more people online and drive the growth of users to unlock their economic potential, the report highlights the barriers and key themes relevant to the next half billion internet users and online shoppers.

Based on a survey of 3,400 customers, the report reveals three key characteristics that affect India's digital ambition: skewed user base and not equitable across socio-economic classes, small transaction base, and large drop-out rate.

According to the report, it takes three to four months for a typical internet user to make the first online transaction, which makes it very critical for companies to retain customers through content. It further observed that among the users, who have been on the internet for two or more years, 61 per cent transact online.

However, it also notes that a large number of users (54 million) stop after the first online purchase due to issues with the user experience. The report summarises that despite the growth of the internet user base in India, online spends will remain limited due to the relatively low per capita GDP in India.

(Edited by Saurabh Sharma)

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