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Spending and saving on the Internet

Indians, specially young Indians have an increasingly 'no savings' culture. Use the Internet to save and invest, not just to spend

Spending and saving on the Internet

I have observed and often written about Indians--specially young Indians--have an increasingly 'no savings' culture and that the highly tempting sales run by the e-commerce companies were playing a role in people being focussed on spending rather than saving. I got a number of emails, some agreeing with this view and some opposing it. A typical case of the latter was from a long-time Value Research reader who is the founder of a discount shopping site called Nearbuy.

My friend thinks that e-commerce is only incidental to the rise of the no-savings consumer culture. He thinks that commentators like me are just anti-internet and that e-commerce is just the same as retail stores, only over the internet. Even before the age of highly attractive e-commerce sales, newspapers used to be full of ads around the festivals.

This is a common point of view and one that I happen to think is totally wrong. There is a qualitative difference between the consumer culture of the brick and mortar world and that of e-commerce. The biggest difference is the way impulse purchases can take place with complete lack of friction. People are shopping while standing in airport check-in queues, when they wake up in the middle of the night and while sitting on their toilets. People are shopping even while they're driving. Why are e-commerce companies so desperate to shift you on to their apps? Because it's so much quicker and smoother than the web. This is not just a different way to shop, but a way of spending much more money, often on things that you wouldn't otherwise buy. And that clearly means it is something that makes you save less.

There's another factor that dominates Indian e-commerce currently, which is the enormous amount of money the big players are spending to make you spend more. While this may not be a permanent feature, it has no equivalent in brick-and-mortar sales, past present or future.

I'm no luddite and I'm not asking for the past to come back or for some idiotic 'level playing ground' between internet and non-internet business. I myself run a business which pretty much wouldn't exist if there was no internet. However, if any of this is making sense to you, then you must take care to use the internet not just for spending money, but also for saving and investing.