From the desk of Strategic Resources
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Volume: XVII

August, 2008

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Fast Forward

Social Media and Shopping Behaviour

October 02, 2008

Retailers join consumers in the online conversation.

Consumers' use of social media is altering the way they make purchase decisions. To stay relevant, retailers must determine how to incorporate social media, such as social networks and blogs, into their marketing strategies.

Generation Y (those born after 1979) online buyers are more immersed in online and mobile activities than any other generation, according to 2008 research from shopping comparison site PriceGrabber. Some 85% of Gen Y respondents said they participated in social networking, and 57% reported involvement with blogs.

To reach this demographic segment, Web retailers are marketing to them on their own turf. Data from an August 2008 survey of Web merchants sponsored by Internet Retailer found that, of the 39.3% of retail respondents that use social networks, 32% have a page on Facebook, 27% on MySpace and 26% on YouTube.

One way that consumers use social media is to share their customer care experiences with companies and brands. A 2008 study conducted by the Society for New Communications Research for Nuance Communications found nearly three-quarters of respondents choose retailers and products based on others' customer care experiences shared online.

The Nuance study identified online rating systems, discussion forums and blogs as the forms of social media consumers believe are the most valuable sources of information. Trusted sources also included family and friends, word-of-mouth and Consumer Reports.

Mobile Value Added Services: A Rs 16,520 crore industry by 2010
IAMAI

According to a report released today by the Internet and Mobile Association of India [IAMAI], the mobile value added services would become a Rs 16520 industry by 2010. The report, prepared by IMRB, estimates that the industry which is worth Rs 5780 crores in June 2008 would grow steadily at 70% to reach Rs 9760 crores in June 2009 and Rs 16520 by June 2010.

The research also found out that the industry currently contributes 9% to the operator’s revenues which is likely to go up by 12% by 2010.

Commenting on the potential of the industry Dr Subho Ray, president, IAMAI said “the significance of mobile value added services has to be in the context of falling ARPUs of the telcos and the arrival of 3G, the first will make the operators to consider value added services more seriously and the second will provide the users with an elevated experience”. “However, in order for the industry to grow to its estimated size it would be absolutely necessary for the telcos and mobile value added service providers to work in true spirit of a partnership. The government, too, needs to set some ground rules for engagement between telcos and mobile VAS companies”, Dr Ray added.

According to the report, CRBT/RT constitute 40% of the mobile vas pie in June 2008, up from 35% per cent in December 2006; while P2P sms constitutes 37% per cent down from 40% in December 2006.

Out of the current size of Rs 5780 crores, P2P sms contributes Rs 2140 crores which fully accrue to telcos. The balance Rs 3640 crores is divided between various stakeholders including telcos.

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This tracker has been compiled from external sources and does not necessarily reflect the views of the company.
Links provided will take you to the full articles appended at the end of the file.