understanding indian consumers the digital opportunity - india week 2015 fin

Understanding Indian Consumers - The Digital Opportunity

AECAL Asian E-Commerce Alliance GmbHProf. Peter Kabel

While Western countries and China are evolving into a moremature stage of E-Commerce India is at a starting point

0%

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017E 2020E

20%

40%

60%

Popu

latio

n Pe

netr

aion

(%)

Internet User Penetration Curve, USA / China / India, 1990-2020E

Source: World Bank, Hillhouse Capital forecast for India beyond 2014

Catalyst CompaniesNetscape

Yahoo! Amazon.com

eBay

USA China India

Catalyst CompaniesTencent Alibaba JD.com

Catalyst CompaniesSnapdeal

Amazon.in Flipcart

Facebook WhatsApp

80%

100%

India is a mobile and social media game – traditional desktopcomputer to be leap frogged

70%Mobile Subscription Penetration

28%Mobile Penetration

Mobile in India 2014

19%Internet Penetration

31% Urban

69%Rural1,255,777,000

Total Population

349,000,000 Mobile Users (#2 worldwide)

243,199,000 Internet Users

13 %Smartphone Penetration159,000,000

Smartphone Users

13%Social Media Penetration160,000,000

Active Social Media Users

886,300,000 Active Mobile Subscriptions

Source: KPMG

Only the 4 biggest cities alone have more smartphone users than whole Germany

Mumbai

12

8.1

4.7

4.5 29.3

4.4

3.82.8

2.7

Delhi

Hyderabad

Chennai

Germany

Kolkata

Bangalore

AhmedabadPune + 45 cities with

over 1 million inhabitants

Source: IAMAI

Smartphone users (in Million)

Smartphone users are continously connected and spend their time in social networks

Global

Global

42%

18%18%

31%

12%

11%

23%

23%

26%

15%

35% 18%

26%

18%

21%

22%

28%

46%39% 36%

47%54%

25% 22%15%

31%

42%

51% 58%

40%

7%13% 17% 18%

6%

17%7% 9% 6% 7%

US US

Germany

Germany

ChinaChina

IndiaIndia

Frequency of connection (% of respondents)

Ranking of activities based on time spend online (% of respondents)

Source: A.T. Kearney analysis

All day long Every hour (> 10 times a day) 2-4 times a day Once a day or less

Social networking Shopping Online Entertainment Transactional services

Kaleidoscope India.

Kaleidoscope India. There is not one India, but many.

Kaleidoscope India. There is not one India, but many. Society lives in different times side by side – from hyper modernity to mid ages. Unifying seemingly incompatible beleifs and behaviors.

Kaleidoscope India. There is not one India, but many. Society lives in different times side by side – from hyper modernity to mid ages. Unifying seemingly incompatible beleifs and behaviors. Many shades of rich and poor. Metro Areas, Tier II, Tier III and rural.

Kaleidoscope India. There is not one India, but many. Society lives in different times side by side – from hyper modernity to mid ages. Unifying seemingly incompatible beleifs and behaviors. Many shades of rich and poor. Metro Areas, Tier II, Tier III and rural. Different age cohorts with different backgrounds and different digital abilities.

India will never be the same.

India will never be the same. Enjoying the merrits of anonymity.

India will never be the same. Enjoying the merrits of anonymity. Understanding oneself as part of a group. Gain voice. Keep contact and reach out.

India will never be the same. Enjoying the merrits of anonymity. Understanding oneself as part of a group. Gain voice. Keep contact and reach out. Leveling differences and intransparencies.

India will never be the same. Enjoying the merrits of anonymity. Understanding oneself as part of a group. Gain voice. Keep contact and reach out. Leveling differences and intransparencies. Think of: Banking, Health services, Rural services, Information and decision making on every level,

India will never be the same. Enjoying the merrits of anonymity. Understanding oneself as part of a group. Gain voice. Keep contact and reach out. Leveling differences and intransparencies. Think of: Banking, Health services, Rural services, Information and decision making on every level, E-Commerce and the unleash of entrepreneural power.

> 55 years 55-35 years

Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000

Source: Qualitative research / BCG

User Segmentation


Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000


User Segmentation

Active Aspirer2013

28M

Name Age City Occupation Varun 22 Delhi Student

Owns Device(s) Samsung smartphone, Dell Alienware Laptop

Spends 8-10 hours online

Just bought running shoes through Amazon and recharged is phone via paytm, where he received a cashback.

Varun is a final year student of Delhi University. He lives with his small famliy in southern Delhi. His dad is a banker and mom is a teacher. He gets limited pocket money. For him, being cool and trendy maters but at the lowes cost possible. He always hunts for discounts.

Online Activity Playing games, reading news, music/video streaming, shoping - gadgets apparel, video games, movie tickets booking, chatting, dating, browsing, deals/discounts, online courses, jobs/internships

Mostly uses boradband connection at home/university. Uses mobile internet when he is not in WIFI-zone with a prepaid data plan.

Active Aspirer 2013 28M 2018 55M

Name Age City Occupation Anusha 20 Jamshedpur Student

Owns Device(s) Xiaomi smartphone, HP Laptop


Just bought a red top online through Jabong and received a bonus for another buy.

Anusha is a second year college student. She lives away from her family in the college hostel. She uses internet mainly for social media, shopping, deals hunting and knowledge. She aspires to look trendy and fashionable.

Online Activity Browsing information, Music/videos streaming, Shopping (gadgets apparel, lin-gerie, books), Chatting, Social media, Browsing Deals/Discounts, Online Courses, Jobs/Internships

Mostly uses broadband connection at college and has access to a shared WIFI at her hostel. She has a data mobile plan but has to manage cost carefully.

Active Aspirer 2013 28M 2018 55M

Name Age City Occupation Arjun 14 Kochi 9th grade Student

Owns Device(s) Xiaomi Phablet, HP Laptop from older brother


No funds for buying right now ;-(

Although he comes from a well of family, he doesn‘t have a lot of money now. He tries out lots of different types of apps for games, sports, media and for net-working. He is keen to learn tips and tricks and shares those on his various social media accounts.

Online Activity Chatting, Music/videos streaming, Chatting, Social media, Browsing Deals/Dis-counts,

Mostly uses broadband connection at home or at friends. He knows every WIFI between home and his school. On the go he has to be quite cautious because limited data plan.

Selfie Kid


Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000


User Segmentation

Novel Networkers 2013 7M

Entertainment Enthusiasts 2013 23M

Social Shoppers 2013 4M

Professional Pros 2013 7M

Active Aspirer2013

28M

Name Age City Occupation Neha 25 Chitoor School teacher

Owns Device(s) Lenovo A6000 smartphone, hp Laptop


Just bought lingerie online on Clovia and a special medical cream for her mother.

Neha is a school teacher of a private school based in Chitoor (AP). She lives with her parents. Neha uses internet to keep in touch with her friends. She is a fashion junkie and keeps an eye on latest fashion trends. She usually shops for brands not available in her town and is actively researching with reviews before buying.

Online Activity Browsing information, Shopping (gadgets apparel, lingerie, books), Chatting, Dating, Social media, Browsing Deals/Discounts, Online Courses, Streaming Music

Mostly uses the home connection to access the internet. Uses mobile internet when she is outside with a pre paid plan.

Novel Networker 2013 7M 2018 30M

Name Age City Occupation Sikhander 28 Jabalpur Sales manager

Owns Device(s) Micromax smartphone, Acer laptop


Just bought bus tickets online through Redbus and unlocked pay-level in Implosion his favorite game app.

Sikhander is a sales manager at Mahindra Tractors. He lives in the small town of Jabalpur. He is getting married in 3 month. He is a ardent fan of Indian music and cricket. Most of his time on internet is for chatting, social media and watching vi-deos. He likes shopping online but most of the ecommerce companies don‘t ship to his place

Online Activity Information browsing, reading news, music/video streaming, social media, chat-ting, playing games

Uses the office broadband conncection to access the internet. Uses mobile internet when he is on the go on a prepaid plan where he consumes more then 2Gb/month and gets some reimbursement from his employer.

Entertainment Enthusiast 2013 23M 2018 95M

Name Age City Occupation Shalini 31 Bangalore Stay-at-home-mother

Owns Device(s) Samsung S2, Lenvolo Laptop from her former employer.


Just bought a Saree online and a pink handbag on Myntra

Shalinni is a stay-at-home mother of a 1-year old kid. She is an experienced IT professional and is currently on a motherhood break. For her, convenience and quality matters the most. Also, she is the kind of person who loves sharing her updates with her social media firends.

Online Activity Shopping (gadgets, apparel, lingerie, baby products, grocery), Information browsing, reading news, chatting, social media, , online courses, freelance pro-jects, music/videos streaming,

Mostly uses the home boradband connection to access the internet. uses mobile internet when she is outside home with postpaid plan from her husband.

Social Shopper 2013 4M 2018 10M

Name Age City Occupation Rohit 28 Chennai IT Professional

Owns Device(s) IPhone 5s, Apple Powerbook (company), Sony Vaio laptop (from college days)

Spends 4-5 hours online beside work

Just bought a present for his girldfriend on snapdeal and booked a flight trip to Ladakh.

Rohit did his bachelors from BITS Pilani and MBA from IIM Ahmedabad and lives together with two of his colleagues. He thinks about a digital destination to each and every tasks of his life and loves travelling and recently did a trip to Ladakh with his girlfriend, whom he found on the internet.

Online Activity Information browsing, reading news, music/video streaming, shopping (gadgets, apparel, books, movie ticktes), social media, chatting, playing games, travel tickets, banking, taxi services (he loves Olacab)

Mostly uses the home/office broadband connection to access the internet. Uses mobile internet when he is on the go but tries to stay below the 1GB/month limit his prepaid plan is allowing him.

Professional Pros 2013 7M 2018 15M


Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000


User Segmentation

Late Learners 2013 15M





Active Aspirer2013

28M

Name Age City Occupation Ajit 54 Pune Business Owner

Owns Device(s) Nexus smartphone, HCL desktop at office.


Just bought replacement knife set online through Indiamart

Ajit is a businessman who lives with his wife in Pune. He has a small processed food business. Internet helps him to stay updated regarding the market trends and prices and for banking. He does not shop online much, but he appreciates the market transparency coming with the internet. He uses internet to book travel tickets and read news. And just recently he discovered Whatsapp to exchange with his family.

Online Activity Information browsing, reading news, exchanging with family (chatting), travel tickets booking, procurement for his business.

Mostly uses the office connection to access the internet. Uses mobile internet with pre paid plan, which his son is recharging for him at the booth in the street.

Late Learner 2013 15M 2018 20M


Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000

Data Discoverers 2013 49M


User Segmentation

Late Learners 2013 15M





Active Aspirer2013

28M


Tier

I

34-23 years

Tier

II-I

VRu

ral

22-15 years

1950 1960 1970 1980 1990 2000

Data Discoverers 2013 49M 2018 280M


User Segmentation

Late Learners 2013 15M 2018 20M

Novel Networkers 2013 7M 2018 30M

Entertainment Enthusiasts 2013 23M 2018 95M

Social Shoppers 2013 4M 2018 10M

Professional Pros 2013 7M 2018 15M

Active Aspirer2013

28M 2018

55M

Name Age City Occupation Ifran Ali 26 Rural UP Garment business owner

Owns Device(s) Micromax smartphone, Dell Desktop at office


Just bought train tickets online through IRCTC

While he travels to collect his garment, he buys tickets online, uses Google maps to find addresses. He uses facebook and Whatsapp permanently and shares a lot of content on those platforms. He exchanges messages in his local language. Pre-sently he is not buying things online, because of lack of delivery in his area. But he does a lot of business via Whatsapp with suppliers, who share the latest produtcs as images with him.

Online Activity Information browsing, Reading news, Music/Videos streaming if bandwith allows, chatting, playing games.

He uses the office connection to access the internet. At home bandwith is very poor. When on travel he enoyes higher bandwidth of mobile networks on a pre-paid data plan. Because of frequent power cuts his mobile phone became the main device for him.

Data Discoverer 2013 49M 2018 280M

Fundamental change

Common belief Reality

• Most users are from metropolitan areas.• Most users are 18 to 25 years old and affluent.

• 34% of internet users are from smaller urban areas (tier 2, tier 3 and tier 4 cities), and 25% are from rurals areas.• 57% of urban users are older than 25 and will make up 70% of the urban internet population.

Who is online?

How do users access the Internet?

Why are Indian users online?

What drives online traffic?

What impact does the

Internet have?

• Mobile Internet activity is small and irrelevant. • 45% of urban consumers with access to the Internet use only mobile devices to connect.

• Most online users are discount driven.• Deals and discounts dominate online sales.

• Discounts drive 30% of online purchases, but convenience (37%) and variety (29%) are also critical.

• Social media create a positive buzz. Internet users spend most of their time on social media.

• The commercial impact of the Internet is over stated.• eCommerce is very limited.

• Search engines drive traffic more than 40% of the time.• The impact of social media is limited, driving just 25% of traffic.

• Among urban internet users, 40% engage in digital activity at some point in the purchase process, and 13% purchase online.

Source: BCG

AECAL was founded and established by a team withcomplementing skills and backgrounds

Prof. Peter Kabel, Managing DirectorMarketing and Sales

• Teaching Professor for Media Communications at Hamburg University of Applied Sciences• Serial Internet- and Media Entrepreneur (Kabel New Media, Trendbüro, Büro Hamburg, Tone Consultants)• Experienced Investor in European and Indian Startups (i.a. Ixigo)• Active in India for 15 years• Professional background in Consulting, Design and Marketing

Get in touch: [email protected] +49 1714715606

Dominik Gyllensvärd, Managing DirectorFinance and Operations • Consultant with focus on Digital Transformation with project engagement in over 20 countries• Active investor in various digital and E-Commerce ventures• Accenture (strategy consultant)• Frontlineshop (CFO)• dgroup/ diligenZ management consulting

Get in touch: [email protected] +49 1735278789