Fashion and beauty lead as tier-III cities drive e-commerce growth in 2024

Items like casual wear and western apparel emerged as the most sought-after products in 2024, followed by beauty, wellness, and personal care segment that constituted 20 per cent of the total orders

India’s e-commerce sector continued its robust growth trajectory in 2024, propelled by rising demand from smaller cities and an increased focus on omnichannel strategies, according to the Unicommerce 2024 Trends Report.

 

The report, which analysed nearly 900 million transactions processed through the platform, said that fashion and accessories retained their position as the most significant category in terms of order volume, accounting for 29 per cent of all online purchases. 

 

Items like casual wear and western apparel emerged as the most sought-after products in 2024. Closely following was the beauty, wellness, and personal care segment, which constituted 20 per cent of the total orders. Popular items in this category included face and body wash, moisturisers, sunscreens, and health supplements, reflecting consumers’ increasing focus on self-care and grooming.

 

Small cities drive e-commerce growth 

The report also highlighted the rapid rise of e-commerce in Tier-III cities, which saw exponential growth across several categories. Travel accessories saw a 200 per cent increase in orders, driven by products such as backpacks, laptop sleeves, and motorcycle gear. Watches doubled in demand, while books registered an 85 per cent growth, and gaming accessories experienced a 60 per cent surge in orders. These figures underline the growing appetite for diverse product categories in smaller markets, fuelled by increasing internet penetration and improved logistics networks, the report said.

 

Higher discounts, bigger spending in e-commerce 

Discounts reached new highs in 2024, with brands offering markdowns ranging from 15–30 per cent, a noticeable increase from the 10–25 per cent range in 2023. These promotional strategies contributed to higher spending, with the average order value (AoV) witnessing significant growth across categories. 

 

For instance, FMCG products recorded a 17 per cent rise in AoV, jumping from Rs  450+ in 2023 to Rs  530+ in 2024. Electronics and home appliances saw a 12 per cent increase, with AoVs climbing from Rs  1,690+ to Rs  1,900+, while home decor also grew by over 12 per cent, with AoVs rising from Rs  690+ to Rs  780+.

 

Returns and payment preferences 

Meanwhile, return rates saw improvement in 2024, with customer-initiated returns dropping from 10 per cent in 2023 to 7.8 per cent. However, Return to Origin (RTO) orders—those undeliverable to customers—increased slightly from 6.2 per cent to 7.3 per cent. Prepaid orders accounted for 62 per cent of total transactions and were associated with significantly lower return rates (10 per cent) compared to cash-on-delivery (CoD) orders, which saw returns as high as 24 per cent.

 

The year 2024 also marked pivotal for omnichannel retail strategies. The number of stores adopting omnichannel technology (a business strategy that aims to provide a consistent customer experience across all channels) grew by 40 per cent, and ship-from-store orders surged by 50 per cent year-on-year, the report highlighted.