Internet adoption is a recent phenomenon in India with ~70% of total Internet users having fewer than five years of experience on it. 70-75% of users with fewer than two years of history on the Internet were attracted to online shopping due to attractive prices. However, the more mature users valued the convenience of online shopping, and the survey showed convenience outstripping pricing as a key value proposition for users with over five years of history on the Internet.
In our view, the proportion of Internet users with fewer than five years of usage history will stay high at 70%+ for the next few years,
implying that pricing could be of paramount importance to them. However, by 2019 and beyond, more than 40% 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.
