Unicommerce, India‘s largest e-commerce focused SaaS platform, has once again brought an insightful data-driven festive trends report to understand the changing dynamics of India’s e-commerce ecosystem. The report analyses shopping trends for the festive month of 2019 and 2020. The time period for the analysis is 30 days prior to Diwali with a sample size of over 44 million orders.
This festive season e-commerce industry reported 56 percent growth in order volume as compared to the festive season last year. The increasing order volume also led to a 50 percent growth in GMV as compared to last year's festive season. The consumers have become more value-conscious than before and now are shopping across new categories. The rise of new categories such as personal care and beauty products and higher sales of lower value products has led to a decline in average order value by 4 percent as compared to last year's festive season.
This was the first festive season after the world was hit by the pandemic earlier this year and the report deep-dives into sector-wise growth, rising demands from consumers from 'Bharat' and trying to understand the new consumer behaviour. The report will also decode some interesting facts about the growth of brand websites and companies getting serious and focussed on the D2C business model.
What India Shopped During the Festive Season?
- One of the most promising signs for the e-commerce industry is the rising number of first-time online shoppers and the new emerging categories. The personal care category has emerged as the biggest gainer with 176 percent order volume growth over last year's festive month. Beauty and wellness is another category that has reported a 52 percent order volume growth as compared to the previous year’s festive season.
- As people plan to travel and meet families during the festive season, the number of consumers indulging in fashion shopping during the Diwali sale increases significantly. This festive season, the fashion and accessories category witnessed an order volume growth of 71 percent as compared to the previous year’s festive month, which is higher than the industry average.
- The electronics segment continues to be the highlight of festive season sales, with all marketplaces extensively promoting discounts and offers on electronic products. The segment saw substantial growth of 65 percent in order volume as compared to the festive month of 2019.
- Returns continue to be a concern for e-tailers across India. Automation and increasing consumer awareness are leading to a consistent decrease in returns. This festive season, the industry overall observed a 35 percent decrease in return orders as compared to the last year. The fashion and accessories category continues to the category with maximum return orders
Brands Focused Ongoing D2C
- This year we have seen brands getting serious about online selling with constant growth in brands developing their own website. Post-lockdown, the brands have started adopting technology solutions to improve business efficiency.
- This festive season, not just marketplaces but brand websites have also reported huge growth in consumer demand. Big brands are now committed towards selling through their own websites. The brand websites witnessed ~77 percent order volume growth as compared to 60 percent order volume growth of the marketplace.
- It’s interesting to see that in spite of the disparity in order volume growth there is a marginal difference in GMV growth of brand websites and the marketplaces. The GMV for brand websites increased by 48 percent while for marketplaces the GMV increased by 50 percent. This signifies that brands offered more discounts on their own websites than marketplaces to get more customers. This also led to a significantly low average order size on brand websites. The average order size on the brand website decreased by 16 percent as compared to a 5 percent dip for the marketplaces for the period of last year's festive month.
Increasing Shoppers From Tier-II and III Cities of India
- The Tier II and Tier III cities have been growing way-faster than metropolitan cities and its impact is also visible in the festive season sale as well. The Tier II and beyond cities have witnessed a growth of 99 percent as compared to last year's festive season. The growth in Tier I and metropolitan cities remain at around 20 percent.
- The contribution of Tier II and beyond cities is increasing exponentially. In this festive season, Tier II and beyond cities of India contributed over 59 percent of the online consumer demand of India, while traditional metros and Tier I cities contributed around 41 percent to the overall online retail.
- States with metropolitan cities continue to be the dominating states with Delhi, Maharashtra, and Karnataka being the biggest drivers of e-commerce. These three states combined contribute 55 percent of India’s e-commerce volume in the festive month.
Speaking on the festive season report, Kapil Makhija, CEO, Unicommerce, said “The festive season is the most important and opportunistic time of the year for the e-commerce industry. However, this festive season was particularly more special as the world continues to deal with the effects of the pandemic. This festive month we have seen e-commerce grow beyond expectations, and it’s interesting to see the new emerging categories like personal care and beauty and wellness continuing their growth trajectory even during the festive season. With the rising consumer demand on brand websites, brands are now committed towards going D2C and offering great deals to attract more consumers. We are confident that with the rising number of shoppers from Tier II and Tier III cities, the e-commerce industry will continue to see growth momentum in the coming years. This report is another step in our continuous effort of providing valuable insights into the e-commerce industry and helping sellers to simplify e-commerce selling.”