Business News

Ecommerce order volumes will increase by a staggering 37% in 2022.

India’s e-commerce industry recorded a 36.8% year-on-year growth in 2022 although more shoppers returned to the physical stores as Covid-19 fears receded, according to ecommerce enabler Unicommerce.

Unicommerce’s data is based on analysis of more than 500 million transactions. It does not include the data related to sales of mobile phones and smartphones.

Tier-3 markets like Udaipur, Roorkee and Rohtak grew by 64.7% in 2022 year-on-year, while tier-2 markets like Bhopal, Amritsar and Bhubaneshwar clocked an impressive 50.9% growth.

Order volumes from tier-1 cities recorded a 10.3% growth in 2022 compared with 2021.

“Ecommerce growth in India has well and truly moved beyond the large cities to hundreds of tier-2, 3 and smaller cities across the length and breadth of the country,” the report said. “The promise of easy access to large assortments at attractive prices has unlocked large cohorts of buyers in under-penetrated markets.”

Thus, tier-2 and 3 cities not only accounted for a majority (nearly 63%) of total orders placed by users, but both also grew much faster than the tier-1 markets.

In an interaction with ET on September 16Flipkart Group CEO Kalyan Krishnamurthy had said that India’s top 10 cities are now a relatively small part of Flipkart’s total business and the next 30-100 cities are driving the majority of the growth for the Bengaluru-based firm.

“The all-round growth in CY 22 is a result of the improved capabilities of brands and the enablements that technology has been able to offer them,” said Kapil Makhija, CEO of Unicommerce. “Technology will continue to drive business growth, increased efficiencies and enhanced user experience as e-commerce becomes a mainstream channel across all parts of the retail ecosystem.”

Beauty, eyewear surge

Among categories, beauty and personal care, and eyewear were the fastest growing, whereas fashion and apparel continued to lead in terms of order volumes. The beauty and personal care, and eyewear and accessories segments witnessed a year-on-year order volume growth of 76.6% and 55% respectively.

“The growth in the beauty and personal care segment was also fuelled on account of aggressive spends by multiple digital-first players striving to gain market share and consumer mindshare,” the report said. “This has helped the segment consistently outperform over the last two years.”

ET had reported on January 3 that the beauty and personal care category will be the fastest growing category this year as new-age internet brands like Sugar Cosmetics and Mamaearth try to take away share from traditional brick-and-mortar players like Lakme.

The eyewear segment gained much attraction during 2022 with products such as lenses, transparent eyeglasses and sunglasses making it to the top lists of consumers. In India, Lenskart leads the space. ET had reported on December 12 that the company is in advanced stages of talks with Abu Dhabi Investment Authority and its existing investors to raise $350-400 million.

D2C ready to go on its own

Meanwhile, the direct-to-commerce players such as Boat, Mamaearth and The Man Company are focusing more on selling through their own websites and mobile applications than through marketplaces like Amazon and Flipkart. For a number of direct-to-commerce brands, the sales from their own portal grew by 48.3% while sales from marketplaces grew by 21.5%.

Internet first brands tend to focus on selling largely through marketplaces like Amazon, Flipkart, Myntra and Nykaa, among others, as it is easier to scale fast on such platforms due to the large number of users visiting them every day. But over the years, marketplaces have matured and it has become more expensive to sell as rising advertisement costs and more players have made it more competitive, hampering margins.

“They have spent the last two years investing heavily in technology to build a strong supply chain ecosystem and drive traffic to their brand websites,” the report said.

In India, the D2C space is facing the heat of funding crunch, and some players like earwear maker Boat have been forced to delay their IPO plans. Old economy players like Hindustan Unilever and Aditya Birla Group are looking at snapping distress deals in the space.

Hindustan Unilever had said on December 8 that it is investing in Zywie Ventures, which sells plant-based supplement brand Oziva and Nutritionalab. Aditya Birla Group’s internet brands arm TMRW had announced in late November that it has invested in eight digital-first lifestyle brandsIt acquired fashion etailer Bewakoof for about Rs 100 crore in a distress sale.

Omni-channel to more prominent

This year, there was also higher adoption of the omnichannel model among retail brands, with companies leveraging their own stores to fulfil online orders. The ship-from-store witnessed 55.6% order volume growth, with an increasing number of brands going omnichannel, the report said.

The report said that at present omnichannel adoption is more pronounced in mature segments such as fashion, footwear and eyewear, while other segments such as beauty and personal care, electronics, and home appliances are expected to go omnichannel in the coming years.

Retale

Retale

About Author

Leave a comment

Your email address will not be published. Required fields are marked *

You may also like

Business News Digital Transformation

IRCTC adds new buy now, pay later option: Check details

Indian Railways Catering and Tourism Corporation (IRCTC), has partnered with the CASHe to offer a Travel Now Pay Later (TNPL)
Business News

Inox Leisure Q2 reported a net loss of Rs 40.37 crore , revenue up at Rs 374.12 crore.

New Delhi: Multiplex chain operator Inox Leisure Ltd on Wednesday reported a narrowing of its consolidated net loss to Rs
Wordpress Social Share Plugin powered by Ultimatelysocial
error: Content is protected !!