The festive season has started on a high note for e-commerce companies, according to early trends from several industry players.
Last month, even before the flagship sale events went live, analysts at Redseer had estimated that the gross merchandise value (GMV) of e-commerce companies will grow by 20 percent on a year-on-year (YoY) basis to touch Rs 90,000 crore this festive season as consumer sentiment remains upbeat and smaller sellers look to spend more on marketing.
As predicted, fashion, electronics and appliances were the most popular categories across platforms. Sales data from just October 7 and 8 showed that order volumes on e-commerce companies have already grown by over 15 percent on a YoY basis and have more legs, as per Unicommerce, a business-to-business (B2B) company which sells its software to retailers such as Myntra and several others.
“Given that this year’s festive season sale started during the shraad cycle, which was not the case in 2022, we can expect a further spike in numbers during the second leg of the season’s sale," Unicommerce said.
This year customers were seen purchasing expensive items, like phones and TVs, because they were available at a steeper discount. That decision, however, dented the demand for products in other categories.
“While it's too soon to draw any definitive conclusions, early data suggests that consumers are ready to splurge on big-ticket items…Since customers are focused on high-priced items with better pricing…spending on other categories was discouraged,” Satish Meena, advisor to Datum Intelligence, a market research firm focused on consumer technology, said.
He added that this festive season electronics, smartphones, TVs and appliances all saw sales growing anywhere between 4X and 7X on a YoY basis but other categories did not grow as much.
“Clothing, Grocery and Health & Beauty all grew saw a modest jump of 1.5-2.5X only...While there was modest growth during the initial days of the festive season, this growth was lower than expected,” Meena said.
However, that was not the case with all players across the board. Some players saw health and beauty outperform the other categories by growing on a YoY basis.
“On an opening day, categories like Beauty & Personal Care (BPC) and Jewelry recorded over 100 percent growth in demand when compared to the same period last year,” Neha Wali, Head of Revenue and Growth, Myntra, said.
Wali added that the company continues to see shoppers coming from all regions in the country and the base of shoppers was not limited to certain geographies, as was the case in the previous years.
About 45 percent of Myntra’s total orders came from non-metro cities this festive season so far, Wali said.
While companies are tapping new customers by expanding to more contemporary geographies beyond the top metro cities, analysts said those from Tier 2 and beyond regions typically spend less than their peers in the top metro cities.
Like Myntra, even Meesho saw several shoppers from non-metro cities. In fact, “more than 80 percent of orders on Meesho came from Tier 2 and beyond cities like Dhanbad, Chittorgarh, Erode, Jabalpur, Kurnool, Tezpur and Vapi,” a company spokesperson said.
"With this impressive rise in platform orders, we are completely geared up for a successful sale event," the spokesperson concluded.
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