While Covid-19 has affected every business across the country, as a mode of consumption, ecommerce could grow much faster after the pandemic, said a report released by ecommerce software platform Unicommerce on Thursday.
Quoting pre-Covid reports, which said that the ecommerce market in India would be worth $200 billion in size by 2027, Unicommerce said that given the digitisation due to Covid, this number would be attained much faster.
Multiple reasons will drive this adoption, starting from consumers being wary of stepping out of their houses, online orders being fulfilled faster and more efficiently and overall digitisation of the country. Further better use of technology can ensure that consumers order the right product and the need for returns is reduced.
Small-business digitisation
While brands reaching out to consumers directly is one aspect of the pandemic, small businesses adopting digital policies is the other effect, said the Ecommerce Trend Report released by Unicommerce.
Small merchants are leveraging the power of digital platforms like WhatsApp and others to reach out to consumers directly, process orders online and fulfil deliveries offline.
Brands are also looking for opportunities in hyperlocal deliveries, where orders will be accepted online but fulfilments will happen from the nearest merchant partner. Players like Swiggy, Dunzo and others will have a business opportunity in fulfilling these deliveries.
In the D2C (direct to consumer) category, the growth has been 88 percent, the report stated, compared to 32 percent in the marketplace category. Fashion, beauty and wellness, and FMCG and agro are the three major segments popular in the D2C category.
Small towns driving growth
The report also highlighted the prevalence of ecommerce as a popular shopping mode outside the metropolitan cities of India: Delhi, Mumbai, Kolkata, Chennai, Hyderabad, Pune and Ahmedabad. Interestingly, the aspirational youth of smaller cities in the country is driving maximum growth in those locations. While metros get two thirds of the share of overall ecommerce deliveries, tier-three cities onwards have seen the fastest growth.
The report expects the total number of shoppers in small-town India to jump to 170 million in 2023 from 50 million in 2018.
The top three regions continue to be Delhi-NCR, Maharashtra and Karnataka, mainly with consumption being driven by the large state capitals, the report added.
On the share of ecommerce transactions in the total retail market, India stands at 4.5 percent. This number is miniscule when compared with the global standard of 14 percent and China’s 15 percent. But in the country’s context it took years to reach 3 percent from 1.5 percent, but only a few months to jump to 4.5 percent. This was due to Covid19, which forced a lot of people to look online for buying options.
The next big opportunity in ecommerce is in the SaaS model, where players can improve their business metrics across business lines. For instance, one massive opportunity is in warehouse management. Market estimates suggest that this will reach $488 million in 2024 compared to $231 million in 2019, a CAGR of 16 percent.
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