A growth of 25% was seen during the financial year of 2020-21 in the Indian eCommerce market increasing the market size to $38 billion. The growth of the e-commerce market is commendable for two reasons. The first being, the growth occurred despite the lockdowns which were implemented because of COVID-19 and the second reason being there was a 5% shrinkage in the retail market.
How India Shops Online 2021
A report titled, “How India Shops Online 2021” was created by Brain & Company and Flipkart. The report indicated that there was a huge contrast present between India’s retail market and the eCommerce market. The GDP of the country contracted by 5% and as discussed above the retail market shrunk by 5% but despite this in addition to a two-month lockdown in the country which resulted in multiple disruptions in the regional pockets, a growth of 25% was present in the eCommerce market. Many businesses also flourished during the pandemic who simply engaged in creating products and getting them delivered to the buyer with help of couriers such as Professional Couriers, Bluedart, Gati, Shree Tirupati. Also, the real impact of online shopping in India is visible with many start-ups flourishing who have either entered or are about to enter the Unicorn universe. Many of the e-tail companies engage with technology for creating a seamless supply chain and recently, India has been seeing an investor boom in the start-ups who use technology to power their companies.
The report considered that this commendable result even during the ongoing pandemic indicates that in future, by FY 26, the e-retail market will see a growth of $120-140 billion. This estimate is predicted by considering that the eCommerce market will see a growth of around 25-30 per cent in a year over the next five years. Another factor that has contributed to this confidence is the fact that India houses an online shopper base of 140 million making it a hub of third-largest online shopper only after China and the USA. By the end of FY 21, the penetration by e-retail in India was 4.6%. Further penetration is expected in the country following the global trend that indicates that to sustain the post stabilisation scenario, more stabilization occurs.
The growth of the e-commerce market in India can be attributed to the top eight metro cities. According to a report, in the last financial year, one in three people of these eight metro cities shopped online at least once. Even though the initial growth of the eCommerce market is powered by the metro cities, it is believed that the future growth in eCommerce will be largely driven by the small towns. Further, if the trends are to be believed, older and women shoppers have increased in the online shopper base last year, which indicates further promise that small towns will drive the growth. Also, it needs to be noted that many people avoided going out during the pandemic time and thought that ordering products online offers a safer option to get the product delivered right at the doorstep without having the need to step outside.
Different Growth During The Pandemic
Different categories saw different types of growth during the first and the second wave of the pandemic. For instance, a one-time spurt was visible for categories like appliances, mobiles and electronics which kind of slowed down due to recovery of the offline retail and the long replacement cycle. Secondly, a huge growth was visible in the category of groceries, household and personal growth which remained also during the so-called post-pandemic time. However, during the pandemic travel and fashion related products saw a slow growth.
Trends Started By E-Tail Penetration
The penetration made by e-tail created a distinct pattern of trends. Firstly, it was noted that sellers had a very limited amount of time to create an impression in front of their target audience and therefore, communication through images became extremely important. Secondly, vernacular and voice searches have entered the mainstream. In addition to that, influencers and content creators of different social media platforms will play a huge role in the eCommerce market because 40% of the online shoppers have made a purchase through these channels. Also, many small businesses are being opened on these social media platforms.