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Inside the Mind of the Wired Consumer Durables Buyer

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Contents
Introduction ............................................................................................. 2 Executive Summary ................................................................................... 4 THE CONNECTED INDIAN DURABLE OWNER .......................................... 6 Substantial Chunk of Online Indian Households own Durables................... 7 Internet is the Key Medium for Online Durable Owners.............................. 9 Experience and Prolonged Usage have made them Adept Online ............. 10 PURCHASE INTENT OF ONLINE DURABLE OWNERS.................................. 12 Online Durable Owners Harbor High Purchase Intent............................... 13 Intention to Purchase a Durable Good within 6 Months is High ............... 15 Snapshot: Purchase Intent of Television within 12 months ....................... 17 Snapshot: Purchase Intent of Fridge within 12 months ............................ 18 Snapshot: Purchase Intent of Personal Computer within 12 months......... 19 Snapshot: Purchase Intent of Washing Machine within 12 months .......... 20 Snapshot: Purchase Intent of Air Conditioner within 12 months .............. 21 DRIVING PURCHASE DECISIONS FROM THE LIVING ROOM ...................... 22 Internet is the Preferred Medium for Durables Related Search .................. 23 Relevance of Various Information Sources for Purchase Related Research on Durables ................................................... 24 Product Features, Price and Visual Appeal are Searched most Online........ 26 Online Social Spectrum is Buzzing with Consumer Views, Thoughts and Experiences....................................................................... 27 BUILDING BRAND VALUE AND DRIVING CUSTOMER ENGAGEMENT ONLINE........................................... 30 Online Buying is Slowly Catching Pace with Online Product Search........... 31 Online Engagement Enables Brand Differentiation .................................. 33 Methodology .......................................................................................... 34 About the Authors.................................................................................. 35

Introduction
Despite sluggish consumer buying trends witnessed during global recession, the Indian consumer durables industry grew at a phenomenal rate of 32% in March 2010.1 Pegged at Rs 35,000 crores in 2008-09, the industry was earlier dominated by a few players.2 Since the end of 'license raj' and advent of liberalization, this market has been flooded with a host of domestic and international players. It is not surprising to note the peaking levels of awareness about brand image, prices and features of products among discerning Indian consumers who have become more demanding and cautious with exposure to a variety of options. With change in status of durable goods from luxury items to utility goods, which have become necessary to maintain a comfortable lifestyle, the lines between consuming and aspiring classes are increasingly getting blurred. Growth in dual income families leading to higher disposable income, reduction in custom duties and easy access to consumer finance are some of the factors that have facilitated growth of the industry. Cut throat competition amongst players has ensured product availability at lower prices. At the same time, the ensuing battle for product differentiation and price wars has put durable goods players in a tight spot. In such a scenario, the challenge to increase brand consideration and preference among relevant audiences through greater visibility has become intense. Mass media like television and print are unable to garner loyalty and establish sustained marketer-consumer relationships, as their efficacy in selective or contextual targeting is limited. In an age of instant gratification where confidence in traditional, one-way marketing messages sans relevant brand interaction has diminished, a large number of consumers now prefer to research such products and review third party opinions/experiences online from the comfort of their home while making purchase decisions. The internet has arisen as a major source of information today. Growth of social networking sites among other online channels has created an inimitable opportunity for brands to identify changing consumer behaviour and create custom-made experiences to suit prospective buyers. Brand names, branded items and brand performance are common topics of discussion on social platforms online. Since consumers are price and brand conscious while looking for functionality, they prefer to independently seek information about the options available. An increasing number of marketers are adopting the online medium to engage this discerning audience through exclusive product launches online and taking robust measures to increase traffic on their websites. Being an industry that thrives on constant technological innovation and product upgradation, dynamic online interaction which supplements offline marketing strategies becomes a key differentiator for durable brands struggling to capture a significant proportion of the large Indian consumer base. With a 50 million strong online audience, the advantage of internet in engaging 'hopeful' and 'life-long' consumers who display high repeat/repurchase intention for durables is highlighted in our study. Inside the Mind of the Wired Consumer Durables Buyer - a study of the Indian durable consumers usage, attitude and behaviour towards the online medium takes a close look at the growing influence of Internet in driving purchase intention/decisions among them.

1 2

Central Statistical Organization (CSO) Federation of Indian Chambers of Commerce and Industry (FICCI)

Note: The study focuses on five consumer electronics (durable) namely TV, AC, Fridge, Washing Machine and Personal Computer

Executive Summary
The Indian consumer's confidence and demand for durable goods has been robust as the industry recorded the highest average growth rate of 26.1% from April 2009 to March 2010 among all sectors.3 85% online durable intenders referring to the internet as their preferred mode of product search, it is clear that this group is aggressively scouring the net for durables' related research, beating the traditionally popular referral model of influencing purchase decisions by a huge margin of 28%. The online sphere is constantly abuzz with durable goods' related views, opinions and comments shared by existing as well as prospective durable owners, thereby influencing each other's purchase decisions. In such a scenario, the opportunity for marketers to leverage their online presence is increasing exponentially, particularly with Indians becoming increasingly vocal on social media platforms. It is interesting to note that online durable consumers actively share opinions, views and experiences not only on personal blogs, but circulate them across a variety of online platforms including company websites, consumer review websites, social networks and blogs, causing a ripple-effect across online and offline consumers. Rise in popularity of online forums including social networks has given birth to a new model of promotional content creation, with the consumer donning the role of message creator in place of the marketer. Inside the Mind of the 'Wired' Consumer Durables Buyer highlights the impact of online media with consumers becoming brand evangelists sharing positive recommendations or stripping brands naked with negative feedback. Today, they have become a currency or a threat to durable brands depending on whether durable marketers are actively listening to and participating with their consumers where they flock to the most, or not. Keeping positive conversations and brand image alive is a function of the viral-ability of online engagement, its adoption amongst influencers and a sustained effort to spark personalized, one-on-one interaction. Note: The term 'intender' denotes respondents who are online and intend to purchase a durable good, including existing online durable owners and non-owners.

Comparative Growth Rates of Industrial Production based on Use-based Classification (% figures) Sector Basic Goods Capital Goods Intermediate Goods Consumer Goods (i) Consumer Durables (ii) Consumer Non-Durables
Source: Central Statistical Organization

2008-09 2.6 7.3 -1.9 4.7 4.5 4.8

2009-10 2009-10 (Mar 2010) (Apr09 - Mar10) 10.1 27.4 12.7 10.6 32 3.3 7.1 19.2 13.6 7.4 26.1 1.5

Concurrent to this is the increase in internet access and usage with as many as 73% online durable owners spending more than one hour online (weekdays), which is the highest across all other mediums. The average number of online activities undertaken is 17, of which, information search and social networking are in the list of top ten most popular online activities.4 Results from our survey indicate that 76% of existing online durable owners online intend to purchase another durable item, exemplifying a substantial replacement/repurchase demand for durables. Moreover, with

3 4

Central Statistical Organization Source: India Online 2010 Report, JuxtConsult

Substantial Chunk of Online Indian Households Own Durables

The Connected Indian Durable Owner

Ownership of consumer durables, especially white and electronic goods, has permeated rapidly across socio- economic classes of people in India today. They are perceived as necessities for leading a comfortable life among urban and rural consumers alike, and have shed the 'luxury' tag for millions. This becomes evident with a whopping 89% online Indian households possessing consumer durables5.

Share of Online Households Owning Durable Goods

Households without durables 11%

89%

Households owning durable

Source: India Online 2010 Report, Juxt Consult

An impressive 89% of total online Indian households (23.7 million) own durable goods
Across various product categories, our survey indicates that 96% online Indian households own a TV, 83% own a personal computer and 82% own a fridge. In the post-liberalization era, durable goods in India have gained technological competence and have become considerably more affordable. A case in point is the cost of personal computers which has dropped by almost half in the last decade, just as an evident spike in purchase of CTVs and LCDs (Flat Screen) is observed with a steady decline in prices. For example, the cost of a 14-inch CTV in 2000 was as high as Rs 14,000 but in 2010 a 29-inch CTV is available for Rs 10,000 approximately.

Current Ownership of Durables Among Online Households 96% 83% 82% 61% 35%

Internet is the Key Medium for Online Durable Owners

73% online durable owners spend more than one hour online (weekdays), which is higher than time spent on any other media. Television trails with 60% usage, followed by substantially lower 38% preference for Radio. The nature of engagement and depth of interaction offered online are obvious reasons for the medium to gain an edge over static, one-way communication based media.

Television

Personal Computer

Fridge

Washing machine

Air Conditioner

Amongst the 21.5 million online households which own durables, TV ownership is the highest (96%) across all socio-economic classes (SEC A 98.5%, SEC B 83.7%, SEC C 97%)

Media Usage for more than 1 Hour amongst Online Durable Owners (Weekdays) 73% 60%

Source: Digital Consumer Durables Survey 2010, Webchutney

38% 20% 14%

In comparison, ownership of washing machines (61%) and air-conditioners (merely 35%) is not as high. Low figures for AC ownership could be attributed to high running costs and erratic electricity supply in some parts of the country. Rural India accounts for nearly 70% of the total number of households, with 2% penetration in case of refrigerators and 0.5% for washing machines, which offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. The rural market is growing faster than urban India as the urban market is now becoming a replacement and upgradation market.6 With steady increase in disposable incomes, propelled by a buoyant national economy, the opportunity for widespread increase in consumption of durables across online and offline households in India is sizable. 8
6

Internet

TV Channel

Radio Channel

Magazine

Newspaper

73% online durable owners use internet for more than one hour on weekdays, higher than any other medium
Source: India Online 2010 Report, Juxt Consult

9
Federation of Indian Chambers of Commerce and Industry (FICCI), 2005

Experience and Prolonged Usage have made them Adept Online

70% of online durable owners have been using the medium for more than two years exhibiting expertise at accessing information while searching and curating content online. The type of online activities conducted indicate the extent to which an existing durable owner online is connected, at ease with use of internet and participative towards information access, supply and exchange through the medium. Experience in Internet Usage of Online Durable Owners Using for more than 5 years 31% 7 out of 10 online durable owners have been using the medium for over 2 years 40% 29% Using between 2-5 years Using for upto 2 years

Unlike other media forms, online durable owners engage with the internet more often, with 89% of them accessing it daily. Online media offers scope for a vast variety of activities, notable amongst which are job search, service/product/information search and social networking.

Top 10 Activities Pursued by Online Durable Owners on the Net

Job Search Instant messaging/chatting Download music Check general news English info search engine Social networking Non-Travel Products & Services Check cricket content/score Joined online community Dating/Friendship

67% 64% 60% 52% 49% 49% 46% 45% 44% 44%

Frequency of Internet Usage amongst Online Durable Owners 33% 32% 24%

Source: India Online 2010 Report, Juxt Consult

89% online durable owners access the internet daily 7% 2% 1%

1-3 times a month

Search and Interaction feature as prominent online activities. These are avenues where maximum opportunities for selective targeting exist

2%
Once in more than a month

10

Over 5 2-5 times times a day a day

Once daily

Once in 2-3 days

Once a week

Source: India Online 2010 Report, Juxt Consult

Online activities pursued by durable owners are indicative of their preference to procure product related information. These avenues present a great opportunity before marketers to selectively target these audiences. Consumer engagement through unique interactive online executions remains the prerogative of durable marketers.

11

Online Durable Owners Harbor High Purchase Intent

The fabric of Indian society has undergone a dramatic change, significantly in consumer behavior and in their attitude towards consumption of durable goods. Our survey indicates that a majority of existing online durable owners remain relevant target audiences for marketers with high intention to re-purchase new durables.

Purchase Intention of Online Durable Owners

Owner Non-Intender

24% Current Owner plus Intender 76%

Source: Digital Consumer Durables' Survey 2010, Webchutney (Base:1995)

76% of current online durable owners exhibit intention to purchase another consumer durable item

h c r ea

With 78% of online durable owners earning upto Rs 25,000 per month, a majority of online Indian durable consumers are well off and have the purchasing power to afford consumer electronics. Moreover, with durable goods being made available on flexible monthly payment options, their link with monthly income of a person has diminished considerably.

13

The rise in 'needs' for products and services has been replaced by 'wants' and 'demands' in the Indian consumer durables' landscape as a large number of consumers fall in the 'have money, will buy' segment today. In a cluttered durables market flooded with domestic and international brands, the pressure on marketers to capture the large consumer base through product differentiation and increase brand consideration has become greater than ever before.

Intention to Purchase a Durable Good within 6 Months is High

The replacement period of consumer durables in India is falling at a rapid pace. High rate of repeat/re-purchase has attracted a host of branded and unbranded consumer durables' players to India, inducing cut throat competition in the sector. Increasing affordability of the products, coupled with increase in consumers' disposable incomes has led to greater sales in the category. While longevity of durables is high, the trend of consumerism is fast catching on the imagination of Indian masses. Along with rapid changes and upgradations in technology, a high rate of repeat/re-purchase for durables exists.

Monthly Household Income of Online Durable Owners Intending to Purchase

Less than Rs 6250 Rs 6250 -Rs 12500 Rs 12500 -Rs 25000 Rs 25000 -Rs 40000 Rs 40000 -Rs 80000 Rs 80000-Rs 100,000 More than 100,000

16% 33% 29% 7% 7% 6% 2%

Current Durable Ownership vs. Intent to Purchase Another Durable 96% 83% 52% 41% 21% 82% 61% 35% 38% 31%
Currently own Intend to own

A majority of online durable owners intending to purchase another one, earn upto Rs 25,000 per month indicating high purchasing power across classes and masses
Source: Digital Consumer Durables' Survey 2010, Webchutney (Base: 1510)

Television

Personal Computer

Fridge

Washing Machine

Air Conditioner

Source: Digital Consumer Durables' Survey 2010, Webchutney

High purchase demand exists for most durable products, despite high level of current ownership 14 15

Note: Figures indicating intention to purchase represent owners across various product categories.

Time Period Within which Durable Purchase is Intended

3% 13% 3% 34% 17% 10% 44% 33% 13% 62% 36% 37% 40% 50% 3% 13% 3% 14% 9% 13% 3% 10% 8% 29%

Snapshot: Purchase Intent of Television within 12 months

Break-up of TV Intenders
After 24 months 18-24 months 12-18 months 6-12 months Within 6 months

3%
TV Owner Intender

97%

TV Non-Owner Intender

TV

AC

Washing machine

Fridge

Computer

Time Period within which TV Purchase is Intended 50% 25% 11%

Within 6 months 6-12 months 12-18 months

Source: Digital Consumer Durables' Survey 2010, Webchutney

Owner Intender Non-Owner Intender

43% For 4 out of 5 durables, maximum intention to purchase is within 6 months Our survey results exhibit that high replacement demand exists for consumer electronics, even amongst existing owners. Washing machines are voted as the most desired consumer durable, with 84% of respondents intending to buy it within a year. Strong desire for a washing machine could possibly be attributed to the need to save time and energy. Likelihood of purchase for computers, refrigerators and air conditioners amongst online Indians within a year is fairly high at 79%, 75% and 70% respectively. To cater to this strong demand, the time is ripe for marketers to leverage this undercurrent through creative usage of the online medium to engage audiences and drive sales for their brand/products.

32% 25%

4% 0%
18-24 months

9%

0%

After 24 months

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 642)

It is not surprising to witness high repeat/repurchase demand (75%) for TV in the next 12 months among current online TV owners (97%), as it is a highly penetrable product. 17

16

Snapshot: Purchase Intent of Fridge within 12 months

Break-up of Fridge Intenders

Snapshot: Purchase Intent of Personal Computer within 12 months

Break-up of Personal Computer Intenders

25% 75%

Fridge Owner Intender Fridge Non-Owner Intender

27% 73%

PC Owner Intender PC Non-Owner Intender

Time Period within which Fridge purchase is Intended 52% 37% 30% 25% 12% 9%
Within 6 months 6-12 months 12-18 months

Time Period within which Personal Computer Purchase is Intended 54%

Owner Intender Non-Owner Intender

30% 12% 4%
18-24 months

41% 35%

Owner Intender Non-Owner Intender

14% 4%
After 24 months Within 6 months 6-12 months

14% 4%
12-18 months

7%

4%

8%

4%

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 406)

18-24 months

After 24 months

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 431)

High demand among current online Fridge owners intending to purchase another one (75%) in next 12 months (62%) is observed 18

High demand among current Personal Computer owners intending to purchase another one (73%) in next 12 months (71%) is observed 19

Snapshot: Purchase Intent of Washing Machine within 12 months

Break-up of Washing Machine Intenders

Snapshot: Purchase Intent of Air Conditioner within 12 months

Break-up of AC Intenders

55%

45%

Washing Machine Owner Intender Washing Machine Non-Owner Intender

33% 67%

AC Owner Intender AC Non-Owner Intender

Time Period within which Washing Machine Purchase Is Intended

Owner Intender

Time Period within which AC Purchase is Intended 48% 38% 20%

Owner Intender Non-Owner Intender

40% 39% 39%

Non-Owner Intender

30%30% 9% 9% 6%
After 24 months

33% 22% 11% 7% 4% 4% 2%

18-24 months After 24 months Within 6 months 6-12 months

3% 6%
18-24 months

Within 6 months

6-12 months

12-18 months

12-18 months

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 787) Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 486)

High demand among non-owners intending to purchase a Washing Machine (55%) in next 12 months (73%) is observed 20

High demand among non-owners intending to purchase an Air Conditioner (67%) in next 12 months (68%) is observed 21

Internet is the Preferred Medium for Durables Related Search

Driving Purchase Driving Purchase Decisions From Decisions From The Living Room The Living Room

Searching for product information and cross-product comparison on the net has become predominant among online consumers intending to purchase a durable item. The clear advantage of in-depth research offering third party views as well as ease of accessing and collaborating information from multiple sources at one place free of cost is evident with 85% online durable intenders opting Internet as a reliable and convenient source to help them determine the best choice. In comparison, traditional media and surprisingly, even the conventionally trusted dealer/salesman lag far behind. This suggests a change or disruption in the traditional purchase model where the buyer has greater control in selecting the best brand/product suited to personal need.

Online Durable Intenders Prefer Internet for Product Research 85% 57% 48%

45%

42%

Internet

Friends & Family

Television

Magazine/ Newspaper/ Brochures

Dealers

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1510)

8 out of 10 durable intenders online prefer the internet to search for durable goods, beating the traditionally popular friends & family as the most preferred information source

23

Relevance of Various Information Sources for Purchase Related Research on Durables

The strength of an information source is based not just on the magnitude of information it provides but also on the convenience it offers and the credibility that is attached with it. Our survey shows that consumers find company websites and social networking websites as 'more effective' sources of information. While company websites provide detailed information on product specifications/features, price and design, social networks are used for obtaining friends and relatives' opinions on various attributes of durable goods.
.8 Salesman at the Dealers Outlet .6 Less Effective

Reliance on consumer review websites could be attributed to unbiased endorsements by a third party. Websites such as naaptol.com have become popular portals offering facilities to view, compare, buy, review and sell consumer electronics. In a world of choices, the facility to compare and read product reviews can help address customers' information needs. Trust in social networking sites stems from faith in peers, friends and relatives for their views, feedback and personal experiences. The same trusted circle of friends and family is now online, making it convenient to take their opinion with a single message posted on the screen.

Perception of Effectiveness Medium Type More Effective Company Websites/Online Catalogues Online Consumer Review Websites Social Networking Websites Equally Effective Friends/Family/Relatives Salesman at Dealers Outlet Consumer Goods Magazines & TV Shows Online portals (company websites, consumer review websites and social networking websites) are perceived as more effective in enabling search for durables

.4

Consumer Goods Magazines & TV Shows Company Websites and Online Catalotues More Effective

Less Effective

.2

0.0

Degree of Effectiveness

-.2

Online Consumer Review Websites Social Networking Websites

-.4 Equally Effective Family/Friends/Relatives -.8 -1.0 -.8 -.6 -.4 -.2 .0 .2 .4 .6

-.6

Resource

Online channels are considered more effective in researching product information for durable goods 24
Note: The closer a resource is to a particular degree of effectiveness, the stronger it associates with it.

Friends and relatives continue to be a 'relevant' source of information as Indians value the opinions of people close to them for most things, including consumer electronics. The decision to buy a particular consumer durable brand is likely to be made before the customer actually visits the showroom/point of purchase, which could lead to the diminishing role of the salesman/dealer in influencing purchase decisions. While magazines and TV shows seem to be losing their steam as popular information sources, they remain effective in building the brand image of the company. 25

Product Features, Price and Visual Appeal are Searched most Online
While friends and family continue to be most popular source for research on performance of a durable good, the internet adds significant value to purchase decisions with depth of information available from multiple sources. Product Price, Features and Visual Appeal Researched most Online
TV shows & ads Consumer Magazines
12% 19% 22% 7% 31% 10% 6% 27% 28% 8% 17% 7% 32% 9% 22% 8% 24% 12% 4% 29% 7% 47% 23% 11% 10% 28% 8%

Online Social Spectrum is Buzzing with Consumer Views, Thoughts and Experiences
The web is emerging as a powerful medium that invites participation from consumers and keeps them interested, engrossed and engaged. The online space is increasingly becoming a popular medium for consumers to express and share their experiences about products and brands. Overall 55% durable owners shared a durable related experience online and a majority shared positive experience(s). Consumer review websites have become the most popular platform for this exchange. Sharing pre and post purchase experiences is common on the net. Survey results show that positive durables' related experiences are more widely shared online as compared to negative brand experiences. Also, owning certain durable models is a matter of pride and such news put as status messages helps generate buzz across social platforms resulting in instant publicity across a cross section of potential consumers.

Dealer Internet

Friends & Relatives Newspapers

5% 9% 22%

Item features

Price

Brand Image

Performance

Visual Appeal

Type of Experience Shared Pre-Purchase

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1510)

26

Owing to the vast variety available in durable goods, particularly with the rise of multi brand retailers selling consumer electronics such as ezone, Croma and Next among others, product literature as well as salesmen facilitate search for the desired goods only to a limited extent. Vast improvements in technology and consequent innovations in products have brought most durable players at the same level in terms of brand image. The differentiating factor is product functionality, which can be highlighted to a prospective consumer through brand websites. The USP for registering a successful online presence for marketers is to stay ahead of consumer expectations and expand the scale of their online executions to create a unique 'Wow' experience while promoting awareness and recall.

Positive experience

51%

45%

Not shared an experience

4% Negative experience
Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1995)

27

Preferred Online Channel to Share Pre-purchase Experience

Preferred Online Channel to Share Post-purchase Experiences

Consumer goods review website 43%

28% 21%

Company/Brand website

Consumer goods review website 39%

32% 23%

Company/Brand website

8% Other

Social Platforms

6% Other

Social Platforms

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1097)

Findings from our survey indicate that post-purchase a majority of 54% consumers shared experiences about brands on the online domain, out of which 48% were positive brand experiences. A presence on the online space translates into tremendous opportunities for marketers to make their brands visible, available and worthy of discussions that go around on social networking sites and other online platforms. What is interesting is that this word of mouth may or may not be initiated by marketers and still reap benefits, as long as the marketer's products are unique and there is sufficient buzz around them on the interactive medium.

Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1077)

Online campaigns for durable brands can create engaging experiences for potential consumers and trigger word-of-mouth publicity of huge proportions. Of late, consumer review websites have emerged as major platforms where consumers share durables-related experiences that influence prospective buyers in making purchase related decisions.

Type of Experience Shared Post-Purchase

Positive experience

48%

46%

Not shared an experience

6% Negative experience 28
Source: Digital Consumer Durables Survey 2010, Webchutney (Base: 1995)

29

Online Buying is Slowly Catching Pace with Online Product Search

79% of online Indians use the internet for product search and 21% online Indians purchase products on the net7. While penetration of credit/debit cards in the country is on the rise, typically in urban areas, success of e-commerce depends heavily on product quality assurance and security mechanisms put in place to ensure transaction security.

Building Brand Value And Driving Customer Engagement Online

Online Search to Buy Ratio of Various Products in Consumer Durables Category Product Category Mobiles phone, PDA & Accessories Cameras & Optics Consumer Electronics CD/VCD/DVDs Computer Hardware Kitchen Appliances Automobiles (booking) Search 73% 67% 56% 56% 67% 62% 66% Buy 27% 33% 44% 44% 33% 38% 34%

Source: India Online 2010 Report, Juxt Consult

Online shopping or e-commerce hasn't taken off the way it was expected in India owing to a dichotomy in Indian consumers' online buying behaviour. With more than 3 lakh daily online railways tickets bookings and 78% of airline tickets booked online8, it is clear that Indians like to avail of travel products/services available online.

7 8

India Online 2010, Juxt Consult International Air Transport Association (IATA)

31

Online ticketing sells like hotcakes, but online shopping still hasn't hit tipping point in India. Marketers need to build transparent, self-sustained e-commerce 'communities' that empower consumers and induce trust/confidence

Online Engagement Enables Brand Differentiation

Product differentiation in consumer durables is limited to technological innovation and to some extent, style and design. However, the key to building an innovative brand experience lies in targeting the right audiences creatively. Tactful engagement that empowers consumers with more value and choice within their comfort zone through meaningful assets is the first step towards encouraging brand evangelism. A consumer talking about a brand using social media is far more reliable than a marketer shouting about it from a rooftop. Growing popularity of social media, particularly, social networking, and the exponential rise in consumer discussions on them are expected to displace credibility of marketers push-based messaging to a large extent. Brands across the world monitor consumer conversations about their products in the cyberspace, terming these as positive, negative or neutral conversations using various methodologies. With international brands making a foray into the Indian market space, it is time for similar tactics to be deployed in India as well. Evidently, in a cluttered marketplace, a marketer should be where customers habituate. A population of 50 million Indians is online, alive and buzzing, scouring for information and engaging in social networking. 19.9 million Indians on Orkut and 20.9 million on Facebook9 aren't just figures; they bear testimony to the fact that these young, urban consumers are online and on a constant lookout for information, interaction, entertainment and engagement. Consequently, with multiple choices existing in the market, the final purchase decision is not based on publicity in traditional media alone, but also on performance-related reviews received from friends and relatives. Participating in such conversations, driving engagement with social currency and amplifying buzz by driving word-of-mouth from influencers is not a choice that marketers may or may not exercise; it is now or never for durable brands to increase sales and profitability and to survive the race to capture a billion strong consumer base in India.

Trust in online purchase of durable goods can be strengthened through enhanced online presence of marketers providing timely information to consumers and maintaining impeccable standards of product delivery. Taking this a step further, building SEO-friendly web commerce sites which enable ease of use and functionality, encourage consumer reviews and exchange of opinions, integrated with advanced features like real life testimonials from customers through online videos, along with the ability to facilitate cross-product comparisons followed up with excellent customer service and security are vital in promoting the medium. For online buying to work well in India, a real incentive for the consumer has to be attached with the offering and be passed on to the discerning Indian consumer. As internet is the primary source of information for prospective durables goods' buyers, the onus of giving e-commerce the much needed push to become a prevalent trend is critical for marketers more than ever before.

32
9

33
Comscore, July 2010

Methodology
Inside the Mind of the 'Wired' Consumer Durables' Buyer scopes the usage and attitude of online durable consumers. The primary purpose of our study was to understand and analyze online Indians' durable goods' buying behavior and the impact of internet in influencing and driving their purchase decisions. To this effect, a sample of 2000 respondents was taken from a panel of consumers belonging to different demographics - age groups, socioeconomic classes, locations etc. Primary data was collected by means of a questionnaire. The consumer panel was further classified into current and prospective consumer durable owners and intenders and based on different attributes; their attitude towards the use of internet was mapped. The period of the study was July to September 2010.

About the Authors

Sidharth Rao
Sidharth Rao is the Chief Executive Officer and Co-Founder of Webchutney, Indias leading and most awarded web services company. With over 12 years of industry experience, Sidharth has made a significant contribution in shaping the interactive marketing industry in India. Sidharth leads the 150 people strong organization assisted by an excellent management team across New Delhi, Mumbai and Bangalore. He can be reached at sidharth.rao@webchutney.net

Demographics
Our respondent base was classified into four groups, namely, 19-24 years, 25-35 years, 36-45 years and above 45 years. 86% of the respondents were males and 14% were females.

Shweta Bhandari
Gender Wise Break-up of Respondents Female 14% Age Wise Break-up 4% Above 45 Yrs Age 36-45 Yrs 11% 16% Age 19-24 Yrs Shweta Bhandari leads the research team at Webchutney, which publishes thought provoking reports on the state of online in India. She carries a diverse business profile including blue-chip companies like American Express and GE. At Webchutney, she has contributed in writing several research publications such as The Digital Vote Bank, Viral Marketing and more recently the Digital Media Outlook 2009. Her passion for discovery and thirst to engage in new challenges lend immense scope and dimension to this field. She can be reached at shweta.bhandari@webchutney.net 35

86% 69% Age 25-35 Yrs

Male 34

Base: 1995

Ankita Kapoor
Ankita Kapoor is a Research Analyst at Webchutney. She has completed her MBA in Marketing from ICFAI Business School, Hyderabad. Prior to this, she graduated in Journalism from Lady Shri Ram College, Delhi University. She has interned with 'HPCL-Mittal Energy' (HMEL) and 'Business Standard' during her post graduation and graduation respectively. Her strong analytical and communication skills and deep interest in the field have lent new perspectives to the report. She can be reached at ankita.kapoor@webchutney.net

A special thanks to Sushil Kumar for conceptualising and executing the report design.

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