The e-commerce industry reported 56 per cent growth in order volume this festive season as compared to the festive season last year. The increasing order volume also led to the 50 per cent growth in GMV (gross merchandise value) as compared to the last year festive season, according to a new report by Unicommerce, India‘s largest e-commerce focused SaaS platform.
This was the first festive season after the world was hit by the coronavirus pandemic earlier this year. 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 per cent as compared to last year's festive season.
“The festive season is the most important and opportunistic time of the year for the e-commerce industry. It was particularly more special as the world continues to deal with the effects of the pandemic,” said Kapil Makhija, chief executive of Unicommerce. “This festive month we have seen e-commerce grow beyond expectations. 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.”
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 about 176 per cent order volume growth over last year's festive month. Beauty and wellness is another category that has reported around 52 per cent order volume growth as compared to the 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 increased significantly. This festive season, fashion and accessories category witnessed an order volume growth of 71 per cent as compared to the previous year’s festive month, which is higher than the industry average.
The electronics segment continues to be the highlight of festive season sales. The report said that marketplaces are extensively promoting discounts and offers on electronic products. The segment saw substantial growth of 65 per cent in order volume as compared to the festive month of 2019.
However, returns continue to be a concern for e-tailers across India. But automation and increasing consumer awareness is also leading to a consistent decrease in returns. This festive season, the industry overall observed a 35 per cent decrease in return orders as compared to the last year.
The fashion and accessories category continues to the category with maximum return orders
Post lockdown, the brands have started adopting technology solutions to improve business efficiency. Big brands are now committed to selling through their own websites. The brand websites witnessed about 77 per cent order volume growth as compared to 60 per cent order volume growth of the marketplace.
The report said there is a rising demand from consumers from “Bharat” (tier-2, tier-3 cities and rural parts of the country). The tier-2 and tier-3 cities have been growing way-faster than metropolitan cities. The tier-2 beyond cities have witnessed a growth of about 99 per cent as compared to last year's festive season. The growth in tier-1 and metropolitan cities remains at around 20 per cent.
The contribution of tier-2 and beyond cities is increasing exponentially. In this festive season, tier-2 and beyond cities of India contributed over 59 per cent of the online consumer demand of India. Traditional metros and tier-1 cities contributed around 41 per cent 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 about 55 per cent of India’s e-commerce volume in the festive month.
“We are confident that with the rising number of shoppers from tier-2 and tier-3 cities, the e-commerce industry will continue to see the growth momentum in the coming years,” said Makhija.