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Photo: iStock

Covid drives surge in online shoppers, sellers

  • While, most offline retailers continue to struggle in the aftermath of the lockdown, online order volumes have not only recovered to pre-covid levels but also recorded growth led by demand for categories such as pharmaceuticals and FMCG products

New Delhi: India’s lockdown made shoppers order everything, from groceries to electronics, online. This saw new users come into the fold, and also helped sellers and consumers from India’s small towns get online.

Earlier this week, a survey by the Boston Consulting Group estimated that over the last three to four months, around 20% new users have been added to the universe of online shoppers leading to a faster acceleration of categories such as foods and staples—which people bought online as India's lockdown put restrictions on movement and retail stores.

Moreover people also spent more on purchases online, BCG said as it surveyed 3,000 urban consumers and their shopping habits between 20 July to 02 August. In fact, 45% of pre-covid online buyers increased their online purchases between this period.

BCG’s report suggests that users bought more categories online as well as increased their spend on online purchases during the lockdown.

“Many of the categories have seen an even faster acceleration–with fresh foods, staples seeing upto 40-50% new users. There is also increase in the average number of categories bought online – increasing from 4 to almost 6 per user," BCG said in its report released on 17 August.

While, most offline retailers continue to struggle in the aftermath of the lockdown, online order volumes have not only recovered to pre-covid levels but also recorded growth led by demand for categories such as pharmaceuticals and FMCG products, a report by e-commerce focused supply-chain company Unicommerce released earlier this week said.

“It’s not surprising that e-commerce has not only recovered but has grown by 17% as compared to pre-lockdown order volume. The consumer buying patterns and preferences have changed significantly, categories like health and pharma and FMCG & agriculture have seen a surge and exponential growth, with the rise of a large number of first-time online users," the finding of the report said.

Unicommerce estimates that the share of online sales as a contribution to overall retail sales has increased in the first six months of the current year, growing to 4.5% up from 3% in 2019. However, this number may see a slight dip by next year, as offline retail starts recovering in the coming months, the report by Unicommerce said.

Even if that happens, online retailers will find stickiness among several users that tried shopping on the internet the first time.

Interestingly, Unicommerce's findings also estimate that compared to a year ago, shoppers in India's small cities had over the years become a key part of online sales.

India’s tier-3 cities clocked a growth of 53% growth in the period compared to a year ago. Unicommerce compared growth in order volumes in these markets from February 2019 to the same period in 2020.

“Tier III and beyond cities witnessed 53% growth, making it the fastest-growing region. It's also observed that the top 5 cities of Tier III contribute only 22% of the overall Tier III order volume, however in metro’s the top 5 cities constitute 90% of overall order volume," Unicommerce said.

This trend was also seen during India's lockdown as several online retailers reported a significant jump in shoppers from smaller cities.

Fashion-portal Myntra recorded an 86% increase in the number of customers from tier-II and III cities and beyond, the highest so far, during the retailer’s End-of-Reason sale towards the end of June, Mint reported earlier.

Unicommerce also expects a surge in the unique number of online shoppers annually in tier-II and beyond cities to go up to 170 million over the next three years from the current 50 million.

This, said Unicommerce, will be fueled by the rise of social commerce, vernacular language content and improved last- mile delivery will further drive e-commerce growth in tier-2 cities and beyond regions.

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