ONLINE SALES GROWTH SAME AS LAST YEAR, NO MAJOR JUMP DUE TO COVID IMPACT
This festive season has seen 30-40 percent growth in e-commerce volumes with overall growth similar to that witnessed last year. A report by financial services major, Bernstein, said: “While not a negative surprise, we had anticipated a much higher growth for online sales this season given the COVID impact.” This festive season has seen 30-40 percent growth in e-commerce volumes with overall growth similar to that witnessed last year, the report said.
“This, in our view, either reflects unlocking ensuring a better than expected offline momentum or the impact of weak economy on overall festive demand. Our offline checks suggest a mixed read on festive trends with some categories seeing strength and some others still down year on year,” the report said.
Another interesting read was that there were no major supply constraints this season suggesting adequate channel re-stocking. The just-concluded festive season in India was expected to have an increased dependence on e-commerce channels given the impact of COVID.
“Our analysis of consumer income and demand patterns over the past few months had suggested a better situation for Tier III/IV geographies and e-commerce trends suggest a similar pattern,” the report said. While growth for e-commerce channel emerged from all geographies, Tier III/IV outpaced Metro and Tier I/II with booking from these markets increasing to 60 percent of mix vs 55 percent last year.
Tier I and II mainly comprised existing shoppers who are buying more, while Tier III and IV reflect new online shoppers. Apparel (including footwear and sportswear) continues to be the largest category in e-commerce with consumer electronics (mobiles, laptops etc) being the number 2 category. Categories which are gaining scale are grocery, home personal care and household goods. The widening of category choices from consumers also reflects the willingness of consumers to experiment, reflecting their trust on online platforms. Consumer durables have seen 165 percent growth in volumes this festive season with almost all products (TV, AC, washing machine), witnessing a spike in growth.
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