India is on the threshold of a digital revolution. Driven by cheaper mobile handsets and the spread of wireless data networks, the number of Internet users in India is expected to nearly triple from 125 million in 2011 to 330 million by 2016. And although online purchases are just a small portion of commercial activity today, the numbers obscure a critical fact: the Internet’s influence on buying decisions is growing rapidly. This influence affects up to five times more purchases than those actually made online. Online activities such as product research and price comparisons are shaping the preferences of Indian consumers, affecting what they buy and why. Digital influence is expected to greatly accelerate over the next five years. What’s more, digitally influenced consumers earn higher incomes, are disproportionately represented in key product categories, and spend more money on products than their less-connected peers.
How can companies capitalize on this explosion of high-value online consumers? And given the prevalence of mobile-only access, what new models of connection and engagement will be required? To find out, The Boston Consulting Group’s Center for Consumer and Customer Insight surveyed 25,000 Indian consumers aged 18 to 55 living in 26 locations—the biggest metropolitan areas and a mix of tier 1, tier 2, and tier 3 cities. Our goal was to understand the nature and extent of digital influence on buying decisions. To this end, we explored how consumers use the Internet during the product purchase cycle. We then examined specific behaviors of the digitally influenced users. Our analysis assessed the use of digital technology across ten touch points within the three stages of the purchase cycle:
Prepurchase. Product research, price research, search for store locations, and search for discounts or coupons
Purchase. Online ordering and online payment
Postpurchase. Troubleshooting, customer service, accessory purchase, and posting product reviews or comments
We explored the prevalence of digital touch points in 101 product categories, assigning each category a Digital Intensity Index score (DII) on the basis of the extent to which digitally influenced consumers use the Internet in each of the ten touch points of the purchase cycle. (See “What’s Your Product’s Digital-Intensity-Index Score?”)
We also looked at how satisfied digitally influenced users are with their online experiences and the importance of digital media relative to other channels during the purchasing process. The survey’s insights can help guide companies as they develop strategies for reaching and engaging India’s growing base of online consumers.