News: Times of India With rising internet penetration and adoption of mobile devices across the country, companies

selling products and services through websites are looking at smaller cities for expanding business. "Non-metros play a vital role in the growth of e-commerce segment in the country primarily due to ease of purchase...The convenience of shopping online and access to the best international brands is driving this growth among non-metro markets," says Mukesh Bansal, Founder and CEO, Myntra.com, an online shopping portal. According to eBay Census 2011, a study on the Indian e-commerce landscape released last year, as many as 3,311 Indian cities shopped online between July 1, 2010, and June 30, 2011. Of this, over 1,267 were non-metro cities. "Metros have a dominant share of purchases, with Tier 2 and 3 cities catching up fast. Metros contributed 51 per cent of all e-commerce transactions, while Tier 2 and 3 cities contributed about 40 per cent and rural India 9 per cent," the survey said. While consumers in the metros buy products and services mainly because of convenience, those in the non-metros buy due to non-availability of products. Big brands don't find it viable to open shop in small towns and e-commerce is the perfect route to deliver their products to those whose can afford from non-metros, it said. Echoing similar view, Siddharth Puri, Senior Marketing Manager Fetise.com, an online shopping community for Men said, "Fetise get 500-700 orders a day on an average of which about 150220 are from the non-metros." Online shopping portals expect the number of orders coming in from these areas to go up further helped by rising internet penetration, growing purchasing power and adoption of mobile devices. "Use of mobile internet and smart phones has definitely given a push to this sector as the access is available to the consumers on their fingertips," Puri said. According to a Google report, over 70 per cent of search happened in non-metros and over all 50 million people logged on to the internet from mobile phones in 2011. Valyoo Technologies, which runs three e-commerce site -- Lenskart.com, Bagskart.com and Watchkart.com, online shoe store Fashos.com and consumer durables selling website Greendust.com get around 50, 70 and 28 per cent of their business from non-metro cities respectively and have plans to scale their business in these area.

News: Business Standard

Rural India, as well as towns of the tier-II and tier-III category, are fast catching up with the metros in e-commerce, a study says. Whats more, women are increasingly getting active in shopping online by prominently buying lifestyle and electronic items, says the fourth edition of eBay Census. The exercise capturing the year-long trends of buying and selling on the eBay platform from July last year has also revealed that every minute sees four buyers making purchases at the Indian subsidiary of the American internet consumer-to-consumer company. The most expensive purchase on the eBay India platform during the year was a Volkswagen Passat at a price tag of Rs 30 lakh in an auction after the IPL tournament, according to its country manager, Muralikrishnan B. The car, picked up by a Kerala buyer, was special as it was signed by several top cricketers who had participated in the tournament. Till now, the most expensive buy on eBay was a jet some years ago. While Delhi emerged as the leading e-commerce hub in the country, others in the top 10 list were Mumbai, Bangalore, Jaipur, Chennai, Hyderabad, Ahmedabad, Kolkata, Pune and Chandigargh in that order. Even as rural growth in e-commerce is higher than that in metros, the purchase proportion is still higher in the metros at 51 per cent of the total. As for the buying trends, while digital SLR cameras are a fad in metros, binoculars are extremely popular in rural India and smaller towns. And while metros go for cufflinks, the smaller towns settle for wallets. Across the country, the top exported items from India on eBay are solitaire pendants, wrist watches, DVDs, Indian Commonwealth stamps, natural and homeopathic remedies, PC games, sarees, lampwork, crystal and mineral specimens and belly dancing apparel. Among the top 10 imported categories on eBay are cellphones, stamps, watches, natural diamonds, sunglasses, blu ray DVDs, mens shoes, netbooks, digital cameras and laptop batteries. According to the survey, the leading brands on the platform are Sony, Nokia, Samsung, Apple, Reebok, Seagate, Casio, Micromax, LG and Canon. Micromax is the only Indian brand in the list. As for city preferences, Delhi was active in buying body art, Mumbai had a fancy for handbags, Bangalore opted for maximum number of webcam, Jaipur chose to buy a record number of fashion socks, Ahmedabad imported the most nuts and seeds, and Kolkata picked up the highest number of calling cards, among others. Online trading in rural India has jumped up to nine per cent of total sales through eBay, as compared to five per cent posted last year. The 1995-founded firm, headquartered in Californias San Jose, currently holds around 40 per cent of the total market in India.The Indian e-commerce industry, excluding the online travel market, is estimated at Rs 6,340 crore and is expected to grow to Rs 8,630 crore this year.

FILE 3 The latest I-Cube Report on Internet in Rural India by IAMAI and IMRB also suggests that the claimed internet usage in rural India will reach 45 million by December 2012, while the active internet usage will be 38 million.
According to the latest survey by the Internet and Mobile Association of India (IAMAI) and IMRB, out of the total 118.2 million rural population that was considered, 17.8 million claimed to have used internet at least once in their lifetime (claimed internet users), while 14.7 million users have accessed the internet in the last one month (active internet users) (figure 1).

The report adds that the claimed internet usage in rural India, which is currently at 38 million users, will reach 45 million users by December, 2012. Also, the active internet usage will be 38 million, by the same time, growing from the current 31 million users (figure 2). While explaining the purpose of internet usage, it states that rural India will witness a growth of 18 per cent in the usage of internet for e-commerce over the next one year. As per the survey, currently, e-commerce has about 34 per cent of the total usage. Apart from this, the awareness of entertainment and communications usage is the highest (figure 3), while the online finance and rural needs register least awareness. Social networking has much less usage (39 per cent) than its awareness (60 per cent). Entertainment is the primary driver of internet use in rural India. Seventy five per cent of rural users use internet for entertainment, while 56 per cent use it for communications. Users like to access music, videos and photos for entertainment.

The penetration of claimed internet users in rural India has grown from 2.6 per cent in 2010 to 4.6 per cent in 2012, a CAGR of 73 per cent. On the other hand, the penetration of active internet users has grown from 2.13 per cent in 2010 to 3.7 per cent in 2012. In an official communiqu, Dr Subho Ray, president, IAMAI, states, "This is just the tip of the iceberg. In the next two years, a combination of affordable smartphones, optic fibre backbone and local language content is likely to change and beat all projections of internet growth in rural areas."

The report further states that mobile phones are fast emerging as an important point of internet access in rural India. As of June 2012, there were 3.6 million mobile internet users in India, a growth of 7.2 times from 0.5 million in 2010." While mentioning the venue for internet usage, the survey suggests that community service centres (CSC) and cyber cafs are the major points of access for internet users in rural India. About 57.7 per cent of the internet users accessed internet through these common user points. A significant 12 per cent of the internet users access internet on their mobile phones. There is a growing interest amongst the rural constituents seeking information on education. About 81 per cent of claimed internet users seek information pertaining to school/university and exam centres. The survey was conducted in seven states, including Andhra Pradesh, Assam, Maharashtra, Odisha, Rajasthan, Tamil Nadu and Uttar Pradesh. Though the internet usage is highest in English language (figure 4), the availability of content in regional languages will definitely push up their usage. After English, with 79 per cent of the 17.8 million users using internet on the English platform, Hindi ranks second with 32 per cent. Telugu (21 per cent), Tamil (8 per cent) and Marathi (5 per cent) follow next.