Women And Mobile Shoppers In Tier 2 & 3 Cities Are Driving India’s Online Retail Market

On November 20, Google released a report on the findings from a survey it conducted in collaboration with Forrester on online shopping trends in India. The report highlights what’s driving the growth of eCommerce in India, including mobile commerce, female shoppers, and the growing number of people in tier two and tier three cities making purchases online. However, the report also noted some barriers to online retail in India, such as its poor showing regarding customer satisfaction and trust; to make further progress, eCommerce firms must work hard to improve in these areas. The report’s key findings involved:

  • Mobile shoppers. Mobile is driving the market, especially in tier two and tier three cities in India. Half of the online shoppers in tier three cities are already on mobile, compared with just one-third in tier one cities. The percentage of online buyers making shopping queries from a mobile device has grown from 24% in 2012 to 57% in 2014. Forrester forecasts that mCommerce in India will reach $19 billion by 2019.
  • Women. Women are far more active buyers than men in tier one cities. They outspend men online by two to one, and one-quarter of women in tier one cities make mobile purchases.
  • New buyers. More than 70% of people in tier one and tier two cities who do not currently make purchases online are expected to do so in the next 12 months.
  • New growth areas. Home furnishings, cosmetics, and baby care are the next areas of growth for online retail after the success of online retail in the consumer electronics segment.
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China Will Become The First $1 Trillion Online Retail Market By 2019

During Tuesday’s 11.11 (Singles’ Day) Shopping Festival, Alibaba set new online retail records: 278.5 million orders with a GMV exceeding RMB 57 billion ($9.3 billion) (43% of which came from mobile devices). This comes on the heels of the world’s biggest IPO earlier this year, in which Alibaba raised $25 billion. Alibaba’s smaller rival JD.com, which raised $1.7 billion in its own IPO, received more than 14 million orders (40% of which came from mobile) on Singles’ Day 2014, an increase of more than 120% over November 11, 2013. Powered by the cash that their IPOs generated and growing demand among Chinese consumers, Forrester forecasts that China will become first $1 trillion online retail market by 2019.

Several factors contribute to this tremendous growth, including:

  • The rise of mobile shopping
  • eCommerce’s increasing wallet share and category expansion
  • Improving logistics
  • Penetration into lower-tier cities
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The Data Digest: Managing The Holiday Gift Hunt

Anjali Lai

Here in the US, all signs point to winter: Daylight savings has just begun; specialty holiday drinks have been added to cafe menus; and several cities have already witnessed the first snowfall. And with the arrival of the chilly season comes preparation for the mad rush of holiday shoppers.

Although the holiday retail season is shorter this year, given fewer days than average between Thanksgiving and Christmas, consumer expectations of retailers during this holiday season are greater than ever. When it comes to online retail specifically, consumers seek out – and have come to expect – great deals and free shipping throughout their holiday gift hunt. In fact, Forrester’s Consumer Technographics® data shows that shipping cost is the most important factor in a consumer’s decision to purchase from a retail website (such as Amazon.com or Gap.com):

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Indian mCommerce Will Reach $19 Billion By 2019

India’s online retail market is on the radar of global investors and eCommerce players, which have announced investments topping $3.6 billion in the past three months, including $2 billion in Amazon, $1 billion in Flipkart, and potentially $650 million in Snapdeal. Growth in India’s online retail market is powered by its fast-growing smartphone penetration, as customers are increasingly using their mobile phones to buy products online. More than half of Snapdeal’s and Flipkart’s sales and nearly 35% of

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European Online Retail Sales Continue Double-Digit Growth, Spurred By Mobile

Michelle Beeson

This morning when I woke up, one of the first things I did was pick up my iPhone. It’s increasingly part of my morning ritual – whether its checking the weather app for the day’s forecast or using the Starbucks app to pay for my morning coffee on the way to work. And I am not the only one. Forrester forecasts that European online retail sales will increasingly come from sales completed on mobile devices like smartphones and tablets.

 Forrester has now updated its  Western European online retail sales forecast for 2013 to 2018, which plots the growth rate of online sales across 17 European countries and 22 categories. Key takeaways from the forecast include:

  • European online retail sales will continue their double-digit growth through 2018 with a CAGR of 12% from 2013 to 2018, resulting in an online retail market worth €233.9 billion by 2018
  • Southern European markets will grow faster than Northern European markets as they continue to mature. However, the more mature northern European markets are larger online retail markets overall.
  • Online retail sales will be increasingly from mobile devices. Just under half of all online retail sales across the EU-7 will be from online purchases made using a smartphone or tablet by 2018
  • The online grocery category will grow at the fastest rate through 2018 and will surpass consumer electronics to become the second-largest online category in Europe by 2018.
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The Data Digest: Global Brand, Local Strategy: Forrester's Global Retail Segmentation Helps To Hone Your Regional Approach

Anjali Lai

Coffee-lovers just about anywhere around the world are intimately familiar with the sweet feeling of indulging in a Starbucks Frappuccino – but their blended beverages of choice might be starkly unique. Although the Starbucks brand is familiar to consumers worldwide, the taste of a Starbucks beverage varies regionally according to the diversity of palates. Chinese consumers may seek out a Red Bean Green Tea Frappuccino while their Japanese counterparts prefer a Coffee Jelly; Argentinians may count on that Dulce de Leche Granizado Frappucino where Brits treat themselves to a classic Strawberries and Cream.

The Starbucks Frappuccino phenomenon is a metaphor for any global retailer’s optimal international approach. By catering to consumers’ varying tastes, global companies can hone a strategy that is sensitive to diversity — the “art of thinking independently together,” in the words of Malcolm Forbes.

When it comes to eCommerce specifically, consumer tastes differ not only in relation to products but also to purchase methods. According to Forrester’s Consumer Technographics® data, more than half of metropolitan Chinese online adults regularly buy products through both traditional and mobile devices, but only one in four US online adults and even fewer European consumers do this.

 

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Take Your eCommerce Business Global With Our New Playbook

Zia Daniell Wigder

eCommerce revenues are soaring around the globe. This year, the US, Western Europe, and China alone will generate over $800 billion in online retail sales. Growth rates, too, remain staggering in many countries: China’s massive online retail market will more than double between 2013 and 2018, as will Brazil’s. India’s much smaller market will grow by eight-fold during this timeframe.

However, a litany of businesses have failed as they attempted to tap into shoppers outside of their home markets, with many large US and European brands factoring prominently on the list of casualties. eCommerce is no exception: Numerous eCommerce businesses have taken the plunge into new markets, only to find their offerings didn’t resonate with local consumers or they were outsmarted by much savvier local rivals.

What separates successful global eCommerce businesses from their counterparts? Which tactics have proven particularly effective for brands aiming to extend their reach into new markets? What are some of the most common challenges businesses tend to encounter? Our newly published eCommerce globalization playbook helps brands through the thorny process of global expansion. Clients can read our playbook for insights on how to:

Discover and quantify international revenue opportunities. Our playbook includes reports outlining the global opportunity and identifying how eCommerce markets typically develop with time. Our online retail forecasts for the US and Canada, Western Europe, Asia Pacific, and Latin America provide a quantitative look at market sizes and eCommerce trends in these regions.

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Avoiding Missteps When Expanding Internationally

Zia Daniell Wigder

We’ve been having a series of conversations with brands and retailers recently about how to effectively plan for global online expansion. While approaches vary, eBusiness leaders cite similar challenges. In particular, two hurdles to successful international expansion tend to come up repeatedly in conversations:

“Our ROI scenarios are unrealistic.” In a survey of eBusiness professionals in the B2C space, we asked how quickly they expected to see a return on their investments in new global online initiatives. Over three-quarters said either in less than one year or in one to two years. By contrast, leaders of successful global eBusinesses frequently highlight the fact that payback on new initiatives takes at least two years, with many citing three years and up. As a result of this disconnect, eBusiness professionals overseeing new global businesses often find themselves falling short of expectations and struggling to secure the funds needed to succeed. Today, the mismatch between ROI expectations and performance is one of the leading reasons why new global initiatives fail.

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A Comprehensive Review Of The Global eCommerce Landscape, Finally.

Susan Huynh

eCommerce is becoming more globally pervasive. Therefore, retailers must continually adapt their expansion strategies to reflect changing retail consumption behaviors. But what makes a country ready for eCommerce? When making investment decisions, it's certainly important to get the facts about macroeconomic conditions, Internet access, and consumer market size. However, there is much more driving the eCommerce market.

In order for firms to get a full view of a country’s online retail readiness, they must also consider its online activity, consumer payment behavior, and postal courier infrastructure. In a recent study conducted by Forrester's ForecastView team, we investigated 55 global economies to discern the readiness of each eCommerce market. The underlying quantitative framework captures 25 variables under four pillars: consumer behavior, merchant adoption, macroeconomic conditions, and the retail opportunity. The analysis is distilled in the Forrester Readiness Index: eCommerce (FRI).

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Canadian Online Retail Shifts up a Gear, eh?

Peter Sheldon
This week Forrester published our inaugural online retail forecast for Canada. While still lagging behind the US market, online sales in Canada show encouraging signs of growth over the next 5 years. In fact, online sales in Canada have grown from C$15.3 billion in 2010 to C$20.6 billion in 2013 and are expected to reach C$33.8 billion by 2018. A few highlights of note from the forecast:
 
  • Online sales now account for 7% of total retail spend. Forrester forecasts a compound annual growth rate (CAGR) of 10% over the next five years for online sales, however retail total growth (online & offline) in Canada will linger at only 2.8% over the same period. Consequently online sales will account for 10% of total retail spend by 2018, up from 7% today. 
  • Just five categories account for half of the dollars spent online in Canada. Apparel and accessories alone are a C$3.5b plus sector, followed closely by PC;s, consumer electronics, event tickets and groceries. Perhaps this should come as no surprise given these same categories that are also some of the most commonly researched online in Canada. 
  • Average online spend is set to increase 37% by 2018. Today the average Canadian spends C$1,130 a year online which is considerably less than our neighbors in the US (who spend US$1,481), but on the bright side, Forrester forecasts that Canadian online spending will hit $1,552 by 2018. The majority of this growth in online spend will be driven by broader access to products and services that today are only available directly at brick-and-mortar stores or via cross-border delivery from US domiciled retailers.
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