As broadband usage expands in India, convenience will be the main driver for online shopping after 2019, as opposed to pricing being the main issue today, and eventually help e-commerce firms make money, says Morgan Stanley. “Internet adoption is a recent phenomenon in India with under 70 percent of the total internet users having fewer than five years of experience on it,” the merchant banker’s research arm said in its latest report. Also Read - E-commerce rules draft dos and dont’s: No more flash sales on phones, other goods and moreAlso Read - Facebook will now make money from WhatsApp's in-app purchases
“As per our AlphaWise Survey in late 2015, 70-75 percent of users with fewer than two years of history on the internet were attracted to online shopping due to attractive prices,” it said. “But 2019 is the year when convenience could trump pricing within Indian online shoppers.” Also Read - Flipkart to acquire Rs 1,500 crore worth stake in Aditya Birla Group's Fashion retail
Morgan Stanley said the more mature users valued the convenience factor of online shopping, and that their survey had shown this factor to be outstripping pricing as a key value proposition for users with over five years of Net history. The financial services company predicted that the proportion of Net users with less than five years of usage history will stay high at over 70 percent for the next couple of years, implying pricing could be of paramount importance to them.
“But by 2019 and beyond, more than 40 percent of India’s internet user base would have been using the internet for over five years, and that is when convenience is likely to take over. “That is also when e-commerce companies may start seeing an improvement in pricing metrics.”