BackCovid gives major thrust to small players in e-retail mkt
Pandemic helped lift demand for categories that were earlier purchased at large retail chains
PremiumNEW DELHI : India’s online retail market, dominated by electronics and apparel products until the coronavirus outbreak, has seen blazing growth in other smaller and emerging categories since then, a new report said.
According to Unicommerce, an e-commerce focused supply chain SaaS technology platform, fast-moving consumer goods, beauty and personal care products, health and pharmaceutical items, home decor and sports equipment are among the categories finding new buyers online.
Unicommerce analyzed online purchases during January to August 2021 and last year with a sample size of over 40 million orders for its Emerging E-commerce Segments 2021 report, which highlighted segments that had a limited online presence pre-pandemic but have grown in the last 18 months.
Most of the sales for these emerging categories came from tier-1 cities, Unicommerce said. “Before the pandemic, such emerging categories used to hold a very small part of the overall e-commerce business, with limited consumers; therefore, the market share divide between tier I, tier 2, and tier 3 cities was almost equal," it said.
However, the market shares for such categories changed significantly in 2021, with tier 1 cities accounting for over 160% growth for such emerging segments with a market share contribution of 52%.
The pandemic’s boost to online sales is known; however, the lockdowns also helped lift demand for categories that were previously purchased at large retail chains and unorganized retail stores.
E-commerce in India has been traditionally dominated by electronics, mobiles, apparel and footwear. In FY20, e-commerce accounted for 26% of overall consumer electronics sales. For food and grocery, the corresponding figure was a mere 0.5%, according to a Technopak report released in September 2020.
Data from Unicommerce showed that volumes of fast moving consumer goods (FMCG) products grew 74% from the year earlier during January-August 2021, while beauty and personal care products clocked 143%, the highest among all emerging segments.
“The FMCG e-commerce sector saw a major spike at the beginning of lockdown and it was considered as a temporary phenomenon given the conventional nature of the industry, and consumers were expected to go back to old ways of shopping after some time. Today even after 18 months, the FMCG segment continues to grow at a rapid pace," it said.
Kapil Makhija, chief executive officer, Unicommerce said the pandemic has altered consumer buying patterns and accelerated the adoption of technology among brands at a faster pace.
The growth in these categories is also marked by consolidation and competition in the market.
The pandemic also accelerated growth of the beauty and personal category, led by face care and hair care products.
“New age digital companies were able to efficiently meet the rising consumer demand with automated supply chain and digitizations across various cycles of the operation," Unicommerce said. The pandemic also drew new shoppers into the category.
The healthcare and pharmaceuticals sector grew too as the pandemic drove up demand for wellness and immunity-boosting products. The health and pharma sector continues to grow and reported 119% order volume growth in January-August 2021, as compared to the same period last year.
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