Strange co-incidence in online shopping; new additions equal drop-outs

The online shopping segment in India seems to be witnessing a strange phenomenon. For every new shopper on e-commerce platforms an existing shopper seems have dropped out, according to a nine-month long research conducted by Google,  Bain & Company and Omidyar Network.

As many as 50 million Indians opt for online shopping but the same number stopped shopping online over the last year, The Economic Times reported citing the research.

ALSO READ:Amazon, Samara Capital may acquire Aditya Birla Group’s ‘More’

The study showed that 54 million users stopped online transaction after their first purchase in the last year, which translated into a loss around $50 billion for the ecommerce chains, the national daily reported. The main reasons for the online drop-outs are the complex user interface and language barrier.

The ones who opted out comprise mostly of first-time internet users, hailing from lower income groups, the report said.

The research showed many reasons why India’s online shopping is not keeping pace with its internet expansion, the daily said, adding that many new users are not familiar with a shopping cart icon because of their unfamiliarity with the modern physical retail.

There’s also the language problem as many are comfortable with vernacular languages rather than English, the report added.

The research comes at a time when global online retailers are eyeing the Indian online shopping segment. Amazon is reportedly in talks with Aditya Birla Group to acquire ‘More”. Apart from Walmart and Amazon, Chinese behemoth Alibaba, which has invested heavily in India in the retail and payments space through Paytm and BigBasket, is also seeking local retail partners among storied domestic conglomerates such as Tata and Reliance.

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