Digital influence to affect USD 150Bn Indian spending in 2016: BCG

India, considered to be the third largest country after US and china, in terms of internet users, is now on threshold of digital revolution. This digital influence, is expected to accelerate exponentially in the next 5 years, affecting $30 billion spending by Indian consumer today and to grow five folds to $150 billion by 2016 as reported by Boston  Consulting Group. According to the BCG’s previous report the number of internet users in India is expected to increase 3 folds from 120 million in 2011 to 330 million by 2016.

To assess how companies can gain from this digital influence,  the  Boston Consulting Group’s Centre for Consumer and Customer Insights surveyed 25000 Indian consumers, aged between 18 to 55 from 26 cities including big metropolitan and mix of tier1, tier2, and tier3 cities and  explored how consumers use the internet during the 3 stages of purchase cycle i.e. Pre-Purchase, Purchase and Post Purchase and in 101 product categories. Each category is then assigned  a Digital Intensity Index Score(DII) which shows the extent of online activity at different stages of purchase cycle.

The study reveals that most of Indian consumers’ online activity involves the pre purchase stage of the product purchase cycle. Although some purchasing does happen online, post purchase activities—such as product support and service and posting product reviews—are very limited.The most popular sites for online research are company websites and third-party comparison websites, with social media driving only 25% of the commercial consumer traffic.

The report also suggests that in order to capitalize on the rise of digital influence in India, companies must understand the country’s unique commercial environment, which differs from other rapidly developing economies in terms of method of payment, devices used for internet access and category dynamics considering the fact that Good online portals and sources of information are still emerging in many product categories.

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Although the indian consumers are not yet into internet purchases much as compared to the world averages, still to a large extent they are researching and comparing prices on online shopping sites. Thus, in the present scenario, by integrating online and offline purchases, at the same time engaging consumers and building their loyalty along with having a proper finding and analysis of gaps in Purchase cycle, a greater share of business can be gained by the companies in internet and retail space.

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