E-commerce focused SaaS platform, Unicommerce, has released a data-driven festive trends report that details the dynamics of India’s e-commerce ecosystem. The report analyses shopping trends for the festive month of 2019 and 2020. The time period for the analysis is 30 days prior to Diwali with a sample size of over 44mn orders.
This festive season e-commerce industry reported ~56% growth in order volume as compared to the festive season last year, a month prior to Diwali. The increasing order volume also led to the 50% growth in GMV as compared to the last year festive season. The consumers have become more value-conscious than before and now are shopping across new categories. The rise of new categories such as personal care and beauty products and higher sales of lower value products has led to a decline in average order value by 4% as compared to last year’s festive season, the report states.
This was the first festive season after the world was hit by the pandemic earlier this year and the report deep-dives into sector-wise growth, rising demands from consumers from “Bharat” and trying to understand the new consumer behaviour. The report will also decode some interesting facts about the growth of brand websites and companies getting serious and focused on the D2C business model.
What India Shopped during the festive season
One of the most promising signs for the e-commerce industry is the rising number of first-time online shoppers and the new emerging categories. Personal care category has emerged as the biggest gainer with ~176% order volume growth over last year’s festive month. Beauty and wellness is another category that has reported ~52% order volume growth as compared to previous year’s festive season
As people plan to travel and meet families during the festive season, the number of consumers indulging in fashion shopping during the Diwali sale increases significantly. This festive season, fashion and accessories category witnessed an order volume growth of 71% as compared to the previous year’s festive month, which is higher than the industry average.
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The electronics segment continues to be the highlight of festive season sales, with all marketplaces extensively promoting discounts and offers on electronic products. The segment saw substantial growth of 65% in order volume as compared to the festive month of 2019.
Returns continue to be a concern for e-tailers across India. Automation and increasing consumer awareness are leading to a consistent decrease in returns. This festive season, the industry overall observed a 35% decrease in return orders as compared to the last year. The fashion and accessories category continues to the category with maximum return orders
Brands Focused on going D2C
This year we have seen brands getting serious about online selling with constant growth in brands developing their own website. Post lockdown, the brands have started adopting technology solutions to improve business efficiency.
This festive season, not just marketplaces but brand websites have also reported huge growth in consumer demand. Big brands are now committed to selling through their own websites. The brand websites witnessed ~77% order volume growth as compared to 60% order volume growth of the marketplace.
It’s interesting to see that in spite of the disparity in order volume growth there is a marginal difference in GMV growth of brand websites and the marketplaces. The GMV for brand websites increased by 48% while for marketplaces the GMV increased by 50%. This signifies that brands offered more discount on their own websites than marketplaces to get more customers. This also led to a significantly low average order size on brand websites. The average order size on the brand website decreased by 16% as compared to a 5% dip for the marketplaces for the period of last year’s festive month.
Increasing shoppers from Tier-II and Tier III cities of India
The Tier II and Tier III cities have been growing way-faster than metropolitan cities and its impact is also visible in the festive season sale as well. The Tier II and beyond cities have witnessed a growth of ~99% as compared to last year’s festive season. The growth in Tier I and metropolitan cities remain at around 20%.
The contribution of Tier II and beyond cities is increasing exponentially. In this festive season, Tier II and beyond cities of India contributed over 59% of the online consumer demand of India, while traditional metros and Tier I cities contributed around 41% to the overall online retail.
States with metropolitan cities continue to be the dominating states with Delhi, Maharashtra and Karnataka being the biggest drivers of e-commerce. These three states combined contribute ~55% of India’s e-commerce volume in the festive month.
Speaking on the festive season report, Kapil Makhija, CEO, Unicommerce said, “The festive season is the most important and opportunistic time of the year for the e-commerce industry. However, this festive season was particularly more special as the world continues to deal with the effects of the pandemic. This festive month we have seen e-commerce grow beyond expectations, and it’s interesting to see the new emerging categories like personal care and beauty and wellness continuing their growth trajectory even during the festive season.”
“With the rising consumer demand on brand websites, brands are now committed to going D2C and offering great deals to attract more consumers. We are confident that with the rising number of shoppers from Tier II and Tier III cities, the e-commerce industry will continue to see the growth momentum in the coming years. This report is another step in our continuous effort of providing valuable insights about the e-commerce industry and helping sellers to simplify e-commerce selling,” he added.
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