A deep dive into the investment strategies and financial habits of the online Indian consumer has revealed some interesting facts. A study by Nielsen shows the online Indian consumer is a smarter and more independent investor in comparison to the average Indian consumer, as they have a higher level of financial awareness.
The study also pointed out the affinity of the online Indian consumer towards precious metals, which not only serve as an excellent investment option but also have cultural significance attached to it.
The online Indian consumer is significantly self dependent when it comes to taking investment related decisions, with over two out of five (41 per cent) respondents saying they decide on their own. Around 16 per cent said that they depended on their friends and relatives for advice on investment. Influence of external media on this investor category is not much.
The study showed that as opposed to the average Indian customer, online consumers in India display a marked independence in being self sufficient, and not entirely trusting of people around them. (Click for tables & graphs)
The survey found that almost four out of five (77 per cent) consumers preferred conducting their transactions at the bank branches. Mobile banking is also picking up pace, with 42 per cent using their mobile devices for banking needs. Going beyond online banking, marketers need to look at optimising the user experience on the mobile phone as a means for consumers to conduct business while on the go.
Among the investment products owned, mutual funds/unit trusts were found to be the most preferred form of investment. Coming a close second were precious metals .
Attitude towards risk
The survey also revealed that the online Indian consumer is still a conservative investor. Around 29 per cent of the respondents admitted that they were conservative but can accept minor fluctuations in their portfolio's value. Around 28 per cent said that they would be very concerned about any kind of volatility in their portfolio.
The study therefore shows that cash is still seen as a mode of immediate payment by Indian consumers, as most retail outlets across the country are not equipped with the necessary infrastructure to accept debit or credit cards.
Among the respondents who used credit cards in the last three months, 70 per cent said that they repaid all their credit card dues in full each month. Around 16 per cent of the consumers said that they repaid some of the dues in full each month, while nine per cent admitted to repaying only the minimum amount due each month.
The investment habits of the online Indian consumer provide a window into the future of retail in the country's financial sector. It also highlights the growing popularity of the online medium for financial transaction and at the same time points out certain unique traits of Indian investors, which can help marketers understand the Indian market better.