The country witnessed a rapid shift toward online platforms to buy daily essentials, furniture, clothing, etc., due to the ongoing pandemic, and is taking steps toward digitization with the help of cheaper data and growing internet penetration. After resumption (e-commerce platforms were suspended for 40 days because of Covid-19), some e-retailers saw 100–120% growth in their shipments in a short span of time. Perhaps it reached to next level as most people limit their physical movement due to fear of virus spread.
Bain and Company expects Indian e-retail market to reach 300–350 million shoppers in the next five years, with online gross merchandise value (GMV) of $100–120 billion by 2025. At present, in India, the online retail penetration is 3.4%, which increased at a CAGR of 36% from 2014 to 2019. Still, there is ample space for growth, compared with countries such as China and South Korea, who have a higher penetration rate of 26.2% and 24.2%, respectively.
In India, small towns are elevating the growth as they comprise *50% of shoppers, with 3 of 5 orders coming from Tier-2 cities. Currently, most e-retailers are providing their services to 97% of the pin-codes; this gives sellers an opportunity to have a larger customer base, while running their operations 24*7. In addition, this has empowered small sellers, and smashed the go-to-market barriers for insurgent and incumbent brands. Consumers are also getting easy access to merchandise choice, price, and convenience.
Some interesting behavior of online shoppers are as follows:
- Important 9 minutes: Visitors spend less than 9 minutes per visit on an e-retail platform
- Picture leaves great impressions: One of two visitors browse pictures and one in 15 look for product description. Sellers and brands should focus on uploading clear and better pictures in their platforms
- Product discovery: Nearly one in three in India search for products on the e-retail platforms
- Vernacular search: Searches in local language are gaining popularity such as “parda” is one of the top searched word for curtains
- Online window-shopping: Consumers visit at least 20 pages before any purchase. For categories such as mobile and women’s ethnic wear, consumers browse 50 to 60 pages before buying
- Access to shoppers preferences: Online platforms provide insights on product preferences of Indian shoppers to sellers at the granular level; this helps sellers design their products as per preferences
The e-retailers are evolving to onboard millions of buyers, while entering the “Massification” phase. Homegrown platforms, such as Flipkart backed by Walmart, have enabled support for vernacular languages, including three more regional languages. In 2019, Flipkart introduced Hindi interface and is now adding three more languages such as Tamil, Telugu, and Kannada, which will allow regional consumers to shop with ease. Also, it introduced a new payment option for buyers to pay partial amount at the time of placing the order and remaining through cash on delivery or online payment.
The wave of innovation, empowered with upgraded technology, will create an enormous opportunity for homegrown brands and small sellers to go digital and expand their presence. While you are hustling to taste growth in the digital space, we are impatient to help you to curate your success stories with our deep domain expertise and dedicated employees. To learn more about us click here.