Small Towns, Big Bonanza

Despite low e-commerce penetration, smaller towns and cities have driven sales for online retailers this festive season

- BINU PAUL

Small towns and unbranded fashion brands have dominated the festive season sales this year on e-commerce platforms in India. Consulting firm RedSeer, in its latest report, has said that these sale events have largely become a ‘Tier II+ phenomenon’.

Per RedSeer’s estimates, 64 per cent of the transacting shoppers were from Tier II and beyond cities this festive season. Fashion as a category emerged as the leader in Tier II cities, led by unbranded fashion apparel, wherein one in every five orders had a kurti or a saree in their cart.

“When you look at India as a market, for any consumerfocussed sector, the next wave of growth would always come from Tier II+ cities because that’s where most of the population resides. We are seeing that happen with e-commerce as well. Pre-Covid-19, metro and Tier I cities used to dominate the gross merchandise value (GMV) and shopper share. Now Tier II and beyond cities dominate in both. We must also realise that the penetration of online retail is still very low in Tier II+ markets. So, you will see Tier II+ cities contribute more to the shopper share as well as GMV growth in the next couple of years,” says Sanjay Kothari, Associate Partner at RedSeer.