“Digitally Influenced” Consumers in India
These are excerpts from the report published by BCG experts
titled: From Buzz to Bucks
Digitally influenced purchases, or acquisitions by
those who rely on the Internet for any part of the buying process (before,
during and after), are estimated at nearly $30 billion in India, according to a
Boston Consulting Group (BCG) study, From Buzz to Bucks, released on 25
April 2013. This is about five times the value of e-commerce purchases in
India, BCG said, forecasting that such digitally influenced purchases will
surge fivefold to $150 billion by 2016.
To determine how Internet use affects buying
decisions, BCG’s Center for Consumer and Customer Insight surveyed 25,000
Indian consumers on their online activities during each step of the purchase
cycle, in 101 different product categories. On the basis of the findings, BCG
assigned each product category a Digital Intensity Index (DII). Categories with
the highest DII have the most online activity among category buyers.
Some of the major findings of the reports are as follows:
·
Indian men are far more likely than women to be on
the Internet (32 percent versus 12 percent) and more than three times likely to
be digitally influenced (14 percent versus 4 percent). Although higher income
levels are well represented online, even 18 percent of the lower-income
“strugglers” (whose annual household income is less than $3,300) have Internet
access, and 6 percent are engaged in commercial activity online.
· BCG’s research also dispelled many misperceptions
about Indian consumers. Only 30 percent of online buyers were drawn to Internet
shopping for discounts. A higher proportion (37 percent) valued the convenience
of shopping from home, and 29 percent said that they appreciated the expanded
variety of products available online compared with what is available at
brick-and-mortar stores. In contrast to more advanced e-commerce markets,
digitally influenced consumers in India rely on company websites for detailed
product information as frequently as they refer to third-party sites for
comparative research and online purchases.
· The report highlights that this rapidly expanding
digital influence in India is a call to action for consumer products companies.
By acting quickly and decisively, these companies can mitigate the risk of
being disintermediated from their customers by e-commerce powerhouses as has
happened in the U.S. and China. To capitalize on this growing market, companies
must integrate their online and offline strategies, engage consumers and build
their loyalty, refocus ad spending, actively manage the Internet channel, mind
the gaps in which online activity is low, and optimize the mobile experience.
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