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The Advent of Me-tailing and how Indias shoppers are now buying online
By: Adrian Terron, Executive Director, Retailer & Shopper, Nielsen India

A quarter of urban online consumers intend to purchase food and beverage via an internet-enabled device Over half of Indian online consumers look for deals online Mobile phones & accessories tops purchase intent for online consumers

Marketers who often bemoan the paltry penetration of internet in India relative to its total population will need to quickly revisit their assumptions and suspicion of change. Armed with the knowledge that every mega-trend often begins as a faint glimmer on the consumption landscape, a few brands and retailers are getting out ahead to capture the spending power and imagination of Indias online consumer. Typically urban and above average in affluence, Indias digital shopper isnt just regarding e-commerce as an alternative channel, she is recreating and reshaping her lifestyle in the intangible but infinitely engaging e-tailing stratosphere. No longer shackled to a shopping cart or arduous traffic snarls, e-commerce in India is now becoming the desirable fusion of product, service, content, commentary and conversation meshed together within the browser window of her connected device. A new study on Indias online shopper from Nielsen, a leading global provider of information and insights into what consumers watch and buy, reveals that half of the countrys online respondents have expressed an intent to purchase a mobile phone and accessories while a quarter (25%) expressed an intent to purchase food & beverage via a connected device such as a mobile phone, personal computer or a tablet over the next three to six months.

Deals, discounts, convenience and easy comparison make e-commerce a viable alternative for shoppers.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

Purchase intent on a connected device

Mobile Phone (Including accessory) Computer / Game Software Entertainment Tickets (Movie / Performance / Exhibition / Game, etc.) Books / Newspaper / Magazine (hardcopy / physical subscription) Travel Service Reservation (Flight / Train / Ship /Car) Digital Camera / DV / PDA / MP3 / MP4 / GPS (include accessory) Computer / Game Hardware & peripheral Household Appliance Video / Music Publication (CD, VCD, DVD) eBooks / Digital newspaper or Magazine subscription Apparel / Accessory / Shoes / Jewelry Food & Beverage Health Products / Excercise Equipment Skin Care / Cosmetics Car / Motorcycle and Accessory Household Cleaning Supplies Flower / Gift / Toy Furniture / Household Decoration Pet-related Products Other None of the above
Base: All respondents n=500 Source: Nielsen

50 45 38 36 35 33 31 30 29 26 25 25 23 21 21 19 17 17 6 10 6

Me-tailing - the trend to watch out for

Pure play e-retailers and retailers with an online presence are now focusing on offering shoppers a plethora of choice online. With a fast expanding shopping basket, urban consumers are going beyond the traditional books, clothing and accessories, and now include groceries to create a shopping cart that is not restricted to what any single brick and mortar store offers them. This marks the advent of Me-tailing in India a shopping experience that is curated and created by shoppers to suit their specific needs.

Grocery shopping goes online

Shopper behaviour is being fundamentally changed by the increasing presence and proliferation of online retail. Today, almost three in five (57%) online shoppers have begun comparing prices for household grocery items on their internet-enabled devices while 41 percent have purchased items online in the last month.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

Grocery shopping: Activities carried out on a connected device

Conduct research online (for example, checked price, read a consumer review,) Look for deals online Look up product information online Compare prices for a grocery product online Purchase a product online Look for coupons from an online coupon site Browse a manufacturer's website for a grocery category Read a grocery retailer's circular/yer online Use a digital shopping list Provide feedback about a grocery category through social media (wrote a review, blogged) Other None of the above 8 12 19 17 24 29 32 42 41 46 53 57

Base: All respondents n=500 Source: Nielsen

Similarly, a little more than two in five (44%) online respondents in India spend between ten to twenty five percent of their time online, conducting research on products and their prices.

Total research time on an online connected device

9 12 13 24 28 6 15 4 12 3 10 3 9 9 26 29 21 20 29 14 23 26 25 26 32 37 45 44 37 30 33 18 18 12 17 26 17 39 21 13 25 12 21 19 29 43 32 35 47 35 28 35 8 5 12 8 21 13 25 27 14 10 11 5 10 19 22 7 2 8 7 12

17

14

31

AU

CN

HK

IN

ID

JP 10% - 25%

KO

MY

NZ

PH

SG

TW

TH

VN

AP

<10%
Base: n=6015 Source: Nielsen

26% - 50%

51% - 75%

76% - 100%
All Figures in %

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

The rise of Deal-tailing

Increasingly, there is also a carry-over of offline behaviour into the digital e-tailing ecosystem. The surge in deal-seeking behaviour that has prompted and sustained a plethora of deal weeks by offline retailers, is also prompting similar shopper behaviour online. Over half (53%) of Indias consumers actively look for deals online (See chart on page 3), while 46 percent conduct research on products in the online space. Of the respondents who conduct online research, every one in two do so on a daily basis (51%).

Key online shopper activities

Conduct research online (n=283) Purchase a product online (n=206) Read a grocery retailer's circular/yer online (n=118) Look for deals online (n=266) Look for coupons from an online coupon site (n=161) Compare prices for a grocery product online (n=212) Look up product information online (n=231) Browse a manufacturer's website for a grocery category (n=143) Provide feedback about a grocery category through social media (n=84) Use a digital shopping list (n=94)

51 15 33 46 42 29 36 28 32 19 44 48 38 52 48 35 47

37 51

12

20 39 48 18 16 24 30 37 15 9

Daily Source: Nielsen

Weekly

Monthly

Not only is e-tailing increasingly about finding the best deals for what shoppers intend to purchase, it is quickly becoming the very reason shoppers are buying more impulsively and straying beyond their traditionally defined shopping list. The shoppers vision is no longer restricted by what the shopping aisle offers her.

Drivers of online retail

Interestingly, the impetus for this growing shift to online retail in the last one year has come from the external environment. The main factors shoppers now see as impacting grocery shopping behaviour range from rising food prices (54%) to health factors (50%) and increased transportation costs (46%).

ADD TO CART
Online discounts are prompting more shoppers to log in and make purchases.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

Impact factors for grocery purchase

Rising food prices Health factors (healthy heart, cholesterol, overweight) Increased transportation costs Availability of products with enhanced nutritional benets (eg. vitamin enriched juices, milks etc.) New retail stores open in my area Food labeling information on packaging Food allergy factors (gluten-free, nuts etc.) Availability of organic product options Availability of products in recyclable packaging Opportunity to do my grocery shopping online on any connected device (PC, mobile phone, tablet) Discontinuation of a favorite product Availability of ready-made meals in grocery stores Availability of new retailer-store brand (private label) products in-store Retailer loyalty reward programme Availability of self-service checkouts Option to use hand-held scanners instore while shopping

54 50 46 43 40 39 38 37 35 33 33 33 33 31 31 28
A major impact

36 36 41 40 42 44 42 44 45 41 45 44 46 48 48 42 31

10 15 13 17 18 18 20 20 21 27 23 23 21 22 21

A small impact

None or next to no impact

Base: All respondents n=500 Source: Nielsen

Online retail is increasingly seen as addressing these challenges of offline shopping. With a constant stream of deals and discounts, the ability to build content around key themes like health, social media integration and opinions from other shoppers and the convenience and economy of doorstep delivery, e-tailing is quickly being recognized for its own unique advantages.

Food inflation is driving online consumers to shop for groceries on the net.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

Me-tailing the digital lifestyle is here to stay

The dramatic shift is now occurring because e-tailing in India now offers shoppers the flexibility and customization to recreate their everyday life online. Even items of daily use are now seeing traction. For instance, the intent to purchase cosmetics and skin care online in the next three to six months has gone up to 21 percent compared to 14 percent over two years ago (See chart on page 2). And it is extending beyond products into entertainment - two in five (38%) urban shoppers now purchase movie and theatre tickets via their connected device, an increase of twelve points from 2010. A quarter (25%) of shoppers purchase clothing and accessories online, while 36 percent order physical copies of books, and subscriptions to magazines via their devices. 26 percent pay for and download eBooks, digital magazines and newspaper subscriptions online. From what we wear to what we consume and how we shape our minds everything now has an online point of sale that is constantly responsive to shoppers needs to compare, seek information, navigate choice and seek affiliation with their network of friends and acquaintances. No doubt, offline retailing will always draw-in its constant stream of shoppers who are either not yet online or are still seeking the tactile reassurance of what they are buying. Yet, this growing shift is a signal to brand owners and retailers that being connected to your shopper online and in a manner that makes you part of their everyday lives, has the potential to pay off thanks to the rapid and unstoppable evolution of Indias digitally connected shopper.

About the Nielsen Global Survey The Nielsen Global Survey of Digitals Influence on Grocery Shopping polled more than 28,000 consumers in 56 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. The sample has quotas based on age and sex for each country based on their Internet users, and is weighted to be representative of Internet consumers and has a maximum margin of error of 0.6%. This Nielsen survey is based on the behaviour of respondents with online access only. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60 percent Internet penetration or 10M online population for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Survey, was established in 2005.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

About Nielsen Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen has a presence in approximately 100 countries, with headquarters in New York, USA and Diemen, the Netherlands. For more information, visit www.nielsen.com.

Copyright 2012 The Nielsen Company. All rights reserved. Nielsen and Nielsen logo are trademarks or registered trademarks of The Nielsen Company.

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