E-Commerce Saw 17% Growth Post COVID-19: Report

The report highlighted that the brand websites saw a 88 per cent order volume growth as compared to 32 per cent on marketplaces
E-Commerce Saw 17% Growth Post COVID-19: Report
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The COVID-19 pandemic has acted as a strong tailwind to the already burgeoning e-commerce market in India. Stringent lockdown along with a norm to maintain social distancing helped e-commerce industry to be among a handful that has made the cut of growing at an impressive rate even when the world has gone for an overhaul. Though according to a KPMG report, 78 per cent of Indian have cut discretionary spending to save cash, the e-commerce industry has become the first choice of many and also witnessed many first-time users.

According to a recent report by Unicommerce, it was found that the overall e-commerce sector has not only recovered but also witnessed an order volume growth of 17 per cent as of June 2020. The report revealed there has been a trend of brands directly going to the consumer to provide an enhanced user experience. It was noted that though several brands have created their own website to attract Internet users, brands continue to sell on marketplaces as it still drives the majority of the order volume.

Significant Rise In Brand’s Website Order Volume

The report showed consumers opting for the brand’s official website is increasing at a faster rate than marketplaces. Brand websites have witnessed 88 per cent order volume growth as compared to 32 per cent on marketplaces. The report highlighted that in the last one year, there has been a 65 per cent growth in brands developing their own websites.

The top three segments where the direct to consumer (D2C) brands have registered a deep penetration are beauty and wellness, fashion and accessories, and FMCG and agricultural sectors.

According to the report, the e-commerce sector during pre-COVID time was witnessing a growth of 20 per cent in terms of order volume whereas the gross merchandise volume saw a surge of around 23 per cent of INR 1100 crore. The report underlined segments such as beauty and wellness witnessed a stellar order volume growth of 130 per cent. The segment was followed by FMCG, agriculture and health.

Rising Demand In Tier II And Beyond Cities

The notion of metropolitan city people enjoying the benefits of the e-commerce industry is wading as the e-commerce companies are focusing on tier II cities and beyond. The report noted that almost 66 per cent of the total online consumer demand came from tier II cities and others. It revealed that the tier III and beyond cities registered a 53 per cent growth in terms of online orders. However, the report said that the top five tier III cities only contribute to 22 per cent of overall tier III volume when compared to 90 per cent of the total order volume in top five metro cities.

In India, Delhi-NCR, Maharashtra and Karnataka were the top three regions in terms of total consumer demand. The three-state comprise 65 per cent of all consumer demand.

Dip In Return Orders

Due to the ongoing pandemic, various e-commerce companies have taken up various safety norms which have led to a drop in the return orders when compared to the last year. There was a decline of around 13 per cent of total return orders as compared with last year. In terms of cash on delivery (COD) orders, there was a drop by 20 per cent compared with last year’s 27 per cent. When it comes to pre-paid orders, the e-commerce websites saw a drop by 11 per cent this year on return items when compared to 12 per cent in 2019.

The report highlighted that in tier-II cities, there was a drop of 23 per cent in overall returns indicating a much larger adoption in technology and high rate of last-mile delivery.

Commenting on the report release, Kapil Makhija, chief executive officer, Unicommerce said, “As the world is grappling with the effects of COVID-19, the e-commerce industry in India has seen a major boost since the beginning of this year. With this report, we wanted to throw light on the enormous growth opportunity that lies for the e-commerce industry in India. With changing consumer buying patterns and preferences, raise of new first time online users, increased focus on digitisation by retailers, brands opting for D2C model etc, we are confident the e-commerce industry will emerge as the most promising market across the globe with tremendous growth potential in the future. We at Unicommerce are committed towards simplifying e-commerce selling and this report is a vital step in the same direction. Through this report, we aim to decode the changing consumer patterns, and provide detailed insights on delivery and returns so that it can help the brands and e-tailers plan their e-commerce strategy much more comprehensively.”

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