After years of stagnation, there are indications that the Indian consumer has finally come online. Major online shopping sites Fabmall, Rediff, Indiatimes and Sify report that during 2005-06, Indian consumers have spent Rs 1,180 crore, more than double the Rs 570 crore netted during 2004-05. The Internet and Mobile Association of India (IAMAI), which collated this data, says that over the past two years, online purchases have grown nearly four-fold from 200,000 (in 2002-03) to 790,000 in 2005-06.

This flicker of success has others making a beeline for this segment. Major retailer Pantaloon plans to launch FutureBazaar in November. The site, which will have an e-retailing format for the entire group — Pantaloons, Big Bazaar, Food Bazaar, Central Depot, Converge, Home Solutions, e-Zone and Electronics Bazaar — expects to net revenues of Rs 300 crore in the first year itself. Other consumer groups, too, are looking online. Eight months ago, Aditya Birla Group’s Madura Garments — which has brands like Allen Solly and Peter England — started selling on the online market.

Despite this upturn, online shopping remains a minuscule fraction of the Rs 52,000-crore organised retail. It started with low-margin products like books and cassettes (see ‘Top 10 Buys’), and higher-margin items like consumer durables and apparel entered this space in 2001. Even with a wider choice available, consumers typically surf these sites to compare prices and features.

But according to the latest figures from Internet & Online Association of India (IOAI), 40 per cent of online shoppers said they bought electronic gadgets online. “The perception that electronic items need to be ‘touched’ before buying has changed. Whether you buy a microwave at Fabmall or at a brick-and-mortar shop makes no difference, unless you get an electrician to test the oven,” says K. Vaitheswaran, CEO, Fabmall.

There are, however, certain trends that persist. The IOAI points out that maximum sales come from cheaper products — on Rakhi day in August 2006, Fabmall and Sify sold hampers worth Rs 75 lakh. Another discernible trend is the NRI factor. About 35-40 per cent of transactions on Indian shopping sites are done from abroad.

To strengthen their footing, Sify has acquired Globe Travels, an online company in the US, for the US-India travel segment. It already offers an e-zine Samachar to lure NRI shoppers with news from India.

Rival Rediff Shopping has other plans. It has devised a platform wherein a company can list its products for free and is charged only when a consumer views them. This allows companies to sell their products online without shelling out the extras for real estate, electricity and inventory. Fabmall, on the other hand, has introduced the e-gift certificate that companies can distribute among their employees. A person in Delhi can send an e-gift to his parents, say, in Assam, who can then shop at the portal. Organisations like Infosys Technologies, Wipro and ING Vysya have also subscribed to the e-gift concept.

With traditional retailers buying into cyberspace, online shopping is set to graduate to a new level. In the West, offline retail giant Wal-Mart has achieved some success in synergising its online business with its malls. It directs its in-store shoppers to its site — where they can choose from 100,000 music titles, against just 3,000 in a store —while the site showcases its offsite products allowing surfers to compare and choose.

As more Indians, and their kin abroad, get hooked to the world wide web, more retailers are likely to log on to the online shopping cart.