(Times of India Via Acquire Media NewsEdge) NEW DELHI/MUMBAI: Sarthak Sen, a 21-year-old engineering student in Bhubaneshwar, spent more than half his pocket money last year on shopping for clothes and footwear - and he did that entirely online.
He represents a fast-growing club of people from smaller cities and towns that shop for everything from Samsung smartphones to Adidas shoes to Hidesign bags online, thanks to aspirations that match urban consumers, limited access to malls and top brands, and increasing penetration of internet.
Leading online stores such as Indiatimes Shopping, Jabong and Myntra say that almost half, and in some cases more than half, of their sales now come from tier-II and tier-III towns and cities.
"Consumers in smaller markets observe fashion trends closely and are now at par with the fashion sense of tier-I cities like Delhi and Mumbai," Manu K Jain, co-founder of Jabong.com, says. The site, which came into being just a year ago, gets 50 per cent of its sales from tier-II and III cities with men's footwear, apparel and accessories as well as sports categories driving demand.
A recent study by Google India reveals that 51 per cent of traffic for the its Great Online Shopping Festival held last December came from outside the top four metros, and predicts that online shopping will grow exponentially in 2013 with apparel and accessories being the hottest categories.
E-commerce in the country grew 128 per cent year-on-year last year, with 25 per cent traffic coming from places outside the top 20 cities, it says.
Subhanker Sarker, COO of Indiatimes Shopping, says the firm's e-commerce and shopping business increased three-fold in the last 12 months, helped by a dramatic 40 per cent increase in new customers from tier-II and tier-III cities.
"What is also encouraging is that the proportion of repeat customers from tier II and III cities is more than that in big cities and metros," Sarker says.
Indiatimes Shopping is clocking highest growth in categories like mobile, tablets, electronics, fashion and lifestyle categories from smaller markets.
Myntra says smaller towns and cities accounted for 55 per cent of its overall sales last year. "Besides access, regular marketing and communication initiatives have also increased the trust factor in online shopping, as they are aware of easy payment methods like cash on delivery and hassle free return policies," a Myntra spokesperson says.
Great Online Shopping Festival (GOSF), the 24-hour online shopping festival hosted by search giant Google on December 12 last year, or 12-12-12, proved to be the biggest virtual shopping festival in the country so far.
Held at Google-run site gosf.in, more than 50 e-commerce players participated in the festival, which was only the second of its kind after Citibank brought together 17 retailers for its Citibank OMG (Online Mega Sale).
Buoyed by the grand success of the shopping festival, Google now plans to make it an annual event in India in the line of the 'Cyber Monday', which is the Monday after Thanksgiving in the US when e-commerce sites offer heavy discounts and online sales boom, Nitin Bawankule, industry director, e-commerce, online classifieds and media/entertainment, at Google India, says.
One factor driving online shopping in smaller cities is the rising number of people using mobile phones to access the internet. Google says currently, 30 per cent of all shopping queries in India come from mobile phones.
According to the Google report, categories showing higher shopping frequency online include baby products, home decor and healthcare.
Top motivators for shopping online include cashback guarantee, cash on delivery, fast delivery, substantial discounts compared to retail, and access to branded products, while barriers include inability to touch and try products before purchase, fear of faulty products, apprehension of posting personal and financial details online and inability to bargain.
Shoppers Stop too says more than 20 per cent of its online business come from consumers residing at tier II cities and hinterland. "Nearest towns is generally far off from our stores and accessibility isn't there for people to buy directly," Govind Shrikhande, MD at Shoppers Stop, says.
"However, small town consumers have aspirations and having a website helps them to buy from someone like us since they have a comfort factor as we already have physical stores," he adds.