“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.

For details:

https://www.bcgperspectives.com/content/articles/center_consumer_customer_insight_globalization_from_buzz_to_bucks_capitalizing_indias_digitally_influenced_consumers/