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Business News/ News / India/  ‘E-commerce penetration grew fivefold during covid’

‘E-commerce penetration grew fivefold during covid’

Penetration of FMCG in e-commerce rose from 10% in FY21 to 15.6% in 2021-22

Pandemic prompted new shoppers to buy goods online as mobility remained restricted. getty imagePremium
Pandemic prompted new shoppers to buy goods online as mobility remained restricted. getty image

NEW DELHI : The covid pandemic pushed sales of more fast-moving consumer goods online, with an estimated 10.7 million households buying such products between April 2020 and March 2022, data from Kantar Worldpanel showed.

However, the frequency of purchase, as well as the number of categories purchased, varied across consumer segments.

“The pandemic has propelled FMCG’s footprint on e-com platform. E-commerce penetration soared to 5 times of pre-covid level. Not only recruitment but even on retention front, e-commerce climbed up," the company that tracks household consumption said.

In fact, among those surveyed, 31% of people said they shopped online in the last year. Among these, 28% bought groceries, including fresh vegetables, fruits, poultry, grains and pulses, online.

Grocery is among the top three segments bought online.

Kantar surveyed socioeconomic A and B consumers for this data.

The penetration of FMCG as a category in e-commerce stood at 15.6% for the 12 months ended April 2022, up from 10% a year earlier.

In fact, this figure was 3.6% during the 12 months ended April 2020. The data shows a significant uptick in the adoption of the category online.

The pandemic prompted new shoppers to buy goods online as mobility remained restricted and stores worked under restricted hours.

As a result, new consumers emerged online, and existing shoppers experimented with buying more categories and shopping on more online platforms.

“Currently, for e-commerce, the base is very small, but definitely the growth will sustain. We’re talking about a large country of ours where we only have a small number of e-commerce buyers. So, from that point of view, it is poised for growth for quite some time," said K. Ramakrishnan, managing director, South Asia, Worldpanel Division.

Kantar classified shoppers as evolved e-commerce shoppers and those who are entrants.

In fact, among evolved shoppers, e-commerce contributes to 17% of FMCG consumption versus 3% among entrants.

During the 24 months ended March 2022, evolved shoppers spent an average of 5,620 on buying fast-moving consumer goods online; in contrast, entrants spent 1,164.

Evolved e-commerce buyers, though they were only 13% of total households who shopped online for FMCG goods between April 2020 to March 2022, contributed to 59% of spending on such goods. Evolved shoppers also tend to buy a greater variety of categories at roughly 10, while entrants buy 2.7.

Expectedly, the most evolved e-commerce consumers are affluent shoppers from the top metros.

Shoppers of daily items tend to buy bigger packs through e-commerce, delaying their purchase cycle. They also tend to experiment with variants. This is why niche segments and categories, for instance, have better traction online.

“Personal hygiene categories and some staple food categories are topmost e-commerce recruitment categories. However, as e-commerce buyers evolve, they expand their category repertoire bought from e-commerce," the report said.

When it comes to preference of platforms, evolved shoppers prefer grocery specialist platforms such as Big Basket and Grofers (now called Blinkit). However, entrants are inclined towards trusted e-commerce platforms such as Amazon and Flipkart and discount-driven platforms such as Jio Mart and Dmart.

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Suneera Tandon
Suneera Tandon is a New Delhi based reporter covering consumer goods for Mint. Suneera reports on fast moving consumer goods makers, retailers as well as other consumer-facing businesses such as restaurants and malls. She is deeply interested in what consumers across urban and rural India buy, wear and eat. Suneera holds a masters degree in English Literature from the University of Delhi.
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Updated: 30 Jul 2022, 06:46 AM IST
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