Nichepre Changing Consumer Behavior towards E-commerce in India sw digtalvidya.com © Dighal VidyaNichepro Agenda * Indian e-commerce Path to Sustainability & Prosperity: Challenges & Road Ahead * Changing Consumer Behavior & Buying Patterns * Opportunities and scope for diversification * Segments that will drive growth in next 3-5 years. * Social & Mobile for faster penetration * Opportunity of Facebook for Customer Acquisition in India wae digitalvidya.com © Digtal Vieyawae digitalvidya.com Nichepro Path to Sustainability & Prosperity Lot of momentum behind e-commerce businesses in India over the past two years. E-commerce in India is currently at about INR 75Bn; expected to grow. Consumer and electronic products makes the large chunk of where the market is. A variety of innovative products and services are being offered spoiling customers for choice. The growth of e-commerce industry in India has been phenomenal as more shoppers have started discovering the benefits of using this platform. There is enough scope for online businesses in the future if they understand the Indian shopper's psyche and cater to their needs. © Digital VieyaNichepro + Travel is the largest category in India, followed by consumer electronics and apparel. + The e-commerce market in India is smaller than in other markets that Forrester forecasts in Asia, but it is fastest growing. + Over the past 12 months, VCs have invested heavily in Indian e- commerce market, new players have emerged, and the e-commerce ecosystem has developed. Huge opportunity for companies willing to work through key logistics and payments challenges in india. wae digitalvidya.com © Digtal VieyadglalMiDvA Nichepre Challenges * The Profitability Challenge * The Financial Challenge * The Differentiation Challenge wave digitalvidya.com © Digtal Vieyaaula Nichepra Growth Drivers *Online Tenure +Household Income *Quality of Net Access Logistical Challenges *Merchant Push *Payment option wae digitalvidya.com © Digital VieyaRoad Ahead Nichepre Online Retail Spending to grow at 57% CAGR tio Total online retail spending INR 450 inant INR 400 INR 360 INR 300 nn 202 INR 250 INR 200 pam INR 150 we i8 INR 100 ine 75, Ineso teas Ne i INRO on aT 2012 2013 2014 2018 2016 © 7 fF ) © Online Retail Does not include Travel, Prescription Drugs Source: FORRESTER RESEARCH ONLINE RETAIL FORECAST, 2011 TO 2018 (APAC) wae digitalvidya.com © Digital VieyaNichepre Growth Ahead Net New online Buyers to drive growth Growth Drivers — Online Retail 20% ‘om Oo 0% 2011 = 2012 (F) 2013(F) 2014(F) 2015(F) 2016 (F) -+Y-0-Y Growth - Online Buyers -®-Y-0-Y Growth - Online Spending/Buyer ‘Source: FORESTER RESEARCH ONLINE RETAIL FORECAST, 2011 TO 2016 (APAC) wr digitalvidya.com © Digtal VieyaNichepro Growth Ahead Today's Online Shopper In India Has Inflated Expectations Online shoppers expect to see good deals online accompanied by free or very low-cost shipping. sLocalization is Crucial Two key areas that companies must focus on in all markets — localized payment and fulfillment options ~ are particularly essential in India. wae digitalvidya.com © Digtal Vieyadata Nichepre Consumer Behavior & Buying Pattern Why do Indian Consumers not buy online eel no need to buy products onine It too complicated - Products will not be detvered in good condition - Delivery costs are too high “Think products vl not be devered at all, Don't want to give personal financial information | preter to research onine & then buy instore ‘Don't want to wait or products to be delivered | want to see and touch before | buy ‘ve heard about bad experiences with others | don't have a cre or debit cars | dort want to register in order to make a purchase | don't have convenient intemet access | it know that you could buy products onine 0% 5% 10% 15% 20% 25% 30% 35% 40% ‘Source: Asia Paeitc Technographies Online Benchmark Survey, Q3 2012 (Australia, China, Hong Kong, India, Japan, ‘South Korea) wwe diitalvidya.com © Digtal Vidya ttdgitalMiDyA Nichepro Consumer Behavior & Buying Pattern Indians are no more Price conscious than other Buyers % Agree with Statement om com som on 20m tom I om 11k to shop Price s more | would pay more round betore important to me Yor products mnoxing © than brand names consistent hn urchioe ‘mage te India =China = South korea =Hong Kong =Japan m Australia wave digitalvidya.com © Digtal VieyaNichepre Poised for Rapid Growth E-commerce revenues in India will increase by more than five times by 2016, jumping from US$1.6 billion in 2012 to US$8.8 billion in 2016. The following factors are influencing this growth: “VCs are bullish on e-commerce growth *Online grocery shopping is starting to appeal to the upper- and middle- class consumer +E-commerce is expanding into non metros +Large retailers are looking to build their online presence *Social Media and Mobile are helping accelerate e-commerce adoption wae digitalvidya.com © Digtal Vieya. . Nichepro Social & Mobile * Mobile internet will play a larger role in Market like India; fundamental behavior of what people will be transacting from Mobile will be different from what they are transacting on the ecommerce site. It will play important role not only as a transactional channel but also enabler of offline retail. Online retail has seen a heavy overlap with Social Networking and Search due to aggressive marketing and strong inclination towards Social Commerce + Expect a larger portion of online retail from Social Commerce with India positioning itself as one of the fastest growing Social Networked user base. wae digitalvidya.com © Digtal Vieyaqulagmioya Nichepre Opportunity of Facebook Marketing wae digitalvidya.com © Digital VieyaNichepre “Only 20% of marketing budgets are typically spent on retention. Yet, in many cases, 75% of revenues comes from existing customers.” ‘Source: Flip the Funnel wwe diitalvidya.com © dighal veyadgitalMiDyA Nichepro Customer Acquisition "Influence "Lead =Sale wae digitalvidya.com © Digtal Vieyaqulagmioya Nichepre Time Has Not Changed wae digitalvidya.com © Digital VieyadgitalMiDyA Nichepro Hits (2000) > Likes (2010) vraedigtalidya.com © Digtal veyadglalMiDvA Nichepre # of Fans: Currency for Success! ‘Tata Docomo 8,750,819 Tolecom MTV Readies 4911,33 Kingfisher 4230875 Alcohol wave digitalvidya.com © Digtal Vieyaaula Nichepre Quiz Time! wa cigitalvdya.com © Dighal VieyadglalMipya Nichepre Facebook Edge Rank 6. NFO: News Feed Optimization EdgeRank ¥ uw.d. tere U.- affinity score between viewing user and edge creator ‘W.- weight for this edge type (create, comment, like, tag, etc.) d.- time decay factor based on how long ago the edge was created wave digitalvidya.com © Digtal Vieyaqulagmioya Nichepre Let’s look at few Case Studies wae digitalvidya.com © Digital VieyadglalMiDvA Nichepro 25% Revenue through Facebook Results com *+ 25% of revenue is directly attributable to Facebook + 120% increase in transactions originating from Facebook in last 6 months E-commerce fashion retailer generates 25% of revenue from Facebook. * 75% increase in total website traffic from Facebook in last 6 months wave digitalvidya.com © Digtal VieyaLalit D YA Nichepre aot 25% of Online Revenue through Facebook wave digitalvidya.com © Digtal Vieyaagit DvA Nichepra Over 20% All Sales through Facebook Pome Lead idee mW Kaya Skin Clinic: Generating walk-ins through the Page wave digitalvidya.com © Digtal Vieyadata DYA Nichepra INR 1.5 Million Revenue/Month Chillout with cool ef ~~ . , stravel deals this summer Gyattacn Yatra: Initiating and engaging in conversations with customers wave digitalvidya.com © Digtal VieyadgitalMiDyA Nichepro 30x ROI on FB Ads: 10k+ Tickets Sold Eristoff Invasion: Generating event awareness and driving ticket sales “For the Invasion Festival, Facebook drove more ticket buyers than television, radio and outdoor advertising.” wae digitalvidya.com © Digital Vieyaagai DYA Nichepra wa cigitalvdya.com ‘© Dighal VieyaNichepre Let’s continue this conversation... On Social Media Off Social Media W amypigitalvidya info@digitalvidya.com Leverage Digital Marketing for Revenue Growth? Join our upcoming Training! www.digitalvidya.com Sanaa “S revi