Cultural barriers don't allow women to get online: Arpan Sheth, partner, Bain & Company

There are around 400 million internet users in India, but less than one-fifth of them use the platform for online shopping or transacting any business. E-commerce is about $20 billion and growing faster than offline retail. But its largely a metro, big city phenomenon. In a recent report from Bain & Company in partnership with Google and Omidyar Network, titled Unlocking Digital for Bharat, the research pointed out that around 50 million new users shopped online only once and did not return. However, the report concluded there’s significant potential if new users coming online become e-shoppers as well. In an e-mail interview Arpan Sheth, partner, Bain & Company talks about challenges of growing e-commerce, making internet more relevant for new users and more. Edited excerpts:
Why is it that only a small percentage of the population (even among those who have mobile internet) transact regularly on internet?
These are people who are consuming content on their mobile devices, but haven’t crossed the barrier to make an actual transaction online as yet. The biggest reasons being; lack of trust in getting the right products (quality, delivery) online, need for touch and feel (especially relevant for categories such as apparel), relative convenience of offline channels, and very importantly, uncertainty of grievance redressal. For instance: “what should be done if a product is to be returned” or “will my money be refunded if the transaction fails.”

What challenges do users face and how are these being addressed?
Users face challenges at different points of the digital journey. First, for people who are not yet online, basic internet awareness, affordability (despite recent data price drops), lack of relevant content or reason to come online are key challenges. Additionally, there still exist dogmas and cultural barriers that don't allow women to access the internet. These include fear of bad influences and absence of perceived need. There is work being done on this through different approaches. For instance, the government’s efforts in investing in internet access in rural areas (Bharatnet), innovative ideas developed by start-ups to enable WiFi access and programmes targeted at promoting digital literacy amongst rural women.

Second, once online, the challenge is to keep users engaged with relevant content, as they get familiar with the internet and eventually move towards a transaction. Research shows that as users spend more time on the internet, the share of transactors increases substantially. In this space too there is meaningful progress. In the public sector, a good example is IFFCO-Kisan, a government initiative that provides relevant crop and weather related information to farmers in 11 local languages.

And finally, there are challenges that make users unsure of whether to make an online purchase such as, lack of touch and feel, options, convenience of offline, lack of trust in product/quality and not knowing what to do if something goes wrong. An unsatisfactory first transaction, makes the barriers even harder to overcome. Some ways these are being addressed include; building an increasing omnichannel presence, in relevant categories and building consumer confidence by defining policies and brand messaging around quality, authenticity and returns.

50 million people transacted only once (on e-commerce sites) and did not return online to transact. What are the reasons and how can this change?
This can be looked in two parts: 1) For people who have tried a service and product transaction but have stopped transacting altogether, companies need to address consumer concerns on grievance redressal (product returns, delayed delivery) and drive a change in customer perception (e.g. offline has better options, online has poor product quality and less discounts). 2) People who are currently doing some form of online service transaction like buying movie tickets, booking travel but not buying products, companies will need to build a relevant offering and improve the shopping experience across touchpoints, including imagery and symbols on websites that makes the experience more intuitive.

What are the challenges in making money online (for companies), despite the convenience it offers to users?
The key challenge is consumer ability and willingness to pay will remain muted due to relatively lower per capita incomes, which limits average online spends per user. Hence, apart from just monetizing directly from consumers, companies will need to think of innovative means to monetize like freemium/subscription-based models, monetizing from others in the ecosystem, disintermediation across the value chain and so on. This implies that profitability and scale will take time and companies will have to be ready for the long haul to see returns.