Home >Industry >Retail >E-tail hits it big with small-town shoppers
Amazon said more than 65% of new customers who signed up for Prime membership came from outside the top 10 cities. (Ramesh Pathania/Mint)
Amazon said more than 65% of new customers who signed up for Prime membership came from outside the top 10 cities. (Ramesh Pathania/Mint)

E-tail hits it big with small-town shoppers

  • Flipkart-owned fashion e-tailer Myntra’s ‘End of Reason Sale’ in June-end, the first big e-commerce sale of the year, drew over 3.5 million customers
  • Demand in India’s smaller towns and cities was naturally inclined towards essentials during the lockdown

E-commerce firms and retail brands are seeing a spike in purchases by consumers from small towns, where demand has been recovering relatively quickly after covid-19 disruptions helped push buyers online.

Demand in India’s smaller towns and cities was naturally inclined towards essentials during the lockdown. Now, categories such as electronics and apparel also witnessed a good pick-up.

Amazon India, in its two-day Prime Day sale last week, said it saw more than twice as many customers sign up for Prime membership than in the 2019 edition, and over 65% of the new members came from outside of the top 10 cities. Members registered from towns as far apart as Kullu in Himachal Pradesh, Leh in Ladakh, Dholpur and Sirohi in Rajasthan and Koraput in Odisha.

Moreover, 70% of the nearly 100,000 small and medium businesses (SMBs) that participated were from small towns and they received orders from across 97% of the country’s pin codes, Amazon said.

“Consumers in smaller cities are displaying similar buying trends as those in metros. While essentials such as groceries did well, even priority non-essentials like electronics saw good momentum. The importance of product selection, value pricing and convenience in buying are higher in non-metros," Amit Agarwal, senior vice-president and country manager at Amazon India, said in an interview.

Flipkart-owned fashion e-tailer Myntra’s ‘End of Reason Sale’ in June-end, the first big e-commerce sale of the year, drew over 3.5 million customers.

Myntra recorded an 86% increase in the number of customers from tier-II and III cities and beyond, the highest so far, said Amar Nagaram, CEO, Myntra.

As a result, social commerce firms such as Meesho and DealShare, which rely on social media like WhatsApp to sell their ware, are focusing on vernacular content to target customers in tier-II and III cities .

A Flipkart spokesperson said, aiming to bring the next 200 million customers online, it has expanded supply chain and democratized e-commerce for Bharat.

While the pandemic has impacted consumption, categories such as health (household or hygiene products) and online services (gaming, home entertainment, online education, online banking) are expected to benefit with non-metros showing higher resilience.

“Despite uncertain and challenging conditions, non-metros express a higher degree of resilience. We may see long-term and even permanent changes in consumption patterns," said Ashish Pherwani, partner, EY and media and entertainment lead.

In July, the local arm of Japanese consumer electronics company Panasonic said it has set up a separate function internally—Bharat Marketing—that will work on connecting with more trade partners, use technology to gather real-time information on its inventory in smaller markets.

Manish Sharma, president and CEO, Panasonic India and South Asia, said the move was accelerated as it saw a surge in demand for household appliances during the lockdown.

“We are now mapping India separately—the bigger cities and urban markets. We have formed a function called Bharat Marketing with a focus group to create and execute a strategy towards smaller towns, rural markets," Sharma said in an earlier interview.

Suneera Tandon contributed to the story.

madhurima.n@livemint.com

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