India’s e-commerce is now even bigger than pre-COVID – smaller cities add to the bounty while metros continue to lead

• With people wary of stepping into crowded places, offline retail continues to register a tepid response; however online retail has witnessed a surge.
• A February 2020 vs June 2020 comparison by Unicommerce shows that the sector has grown by 117%.
• Electronics and appliances, and health and pharma products saw the biggest jump after the lockdown.

India went into lockdown in March this year due to the coronavirus pandemic. With only essential supplies being allowed delivery on priority in the initial phases, the e-commerce segment hit the pause button. With the gradual reopening of the markets, e-commerce in India is on the path of recovery.

While offline retail continues to see a tepid response as people are still wary of stepping into crowded spaces, online retail has taken off.

Here’s what people bought after lockdown

According to a report by Unicommerce, an e-commerce focused supply-chain SaaS platform, electronics and appliances and health and pharma products saw the biggest jump after the lockdown. With work from home continuing, the demand for laptops, chargers, mobile appliances continued to be on the rise.

The report also said that while marketplaces saw an overall 130% jump in orders, direct brand websites.

Since June, India has also seen massive sales events from e-commerce companies – from Myntra’s End of Reason sale to Flipkart’s Independence day sale and Amazon’s marquee event, Prime Day sales. That has also helped boost the order volumes.

In fact, in its earnings report, Walmart has said that since the reopening of lockdown, GMV (Gross Merchandising Volume) at Flipkart has exceeded pre-COVID-19 levels.

In July, Flipkart had said that it had surpassed 1.5 billion visits per month and reported 45% growth in monthly active customers and 30% growth in transactions per customer for FY20.

First-time shoppers emerge

One of the significant drivers of e-commerce is also the adoption of a digital first approach. E-commerce continues to be dominated by the top 5 cities of India, with Delhi, Maharashtra and Karnataka making up for over 65% of the consumer demand.

However, there’s also a growing trend of shoppers from Tier II and III cities. The likes of Amazon and Flipkart too have been focussing on the ‘new consumers’ from smaller cities with initiatives like a vernacular language approach.

This has been further boosted due to the pandemic. Tier III markets have seen a 53% year-on-year growth in e-commerce adoption, with fashion and apparel being the drivers of change in this region.

“As people are practising social distancing, the e-commerce industry is witnessing an important chapter with a surge in first-time online shoppers, and this change will provide a significant boost to the sector in the long run,” said Kapil Makhija, CEO of Unicommerce.

Revenge buying

With the coronavirus lockdown and people being stuck in their homes, ‘revenge buying’ has also taken off, where consumers have not many places to go or offline retail outlets to shop at and that’s why they are turning to online sales.

“The early numbers of recovery establish that there is a systematic shift in consumer demand from offline to online. The post- pandemic world will entail new consumer behaviours and retail strategies,” said the report.

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