Economic Survey 2023: E-commerce sees windfall in post-Covid period with 69.4% surge in FY22 orders

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The post-Covid period has been most successful for Indian e-commerce startups in terms of order volumes and valuations, the government noted in its pre-Budget Economic Survey on January 31, as the companies received a renewed push after easing of pandemic curbs.

“Overall e-commerce order volume witnessed a growth of 69.4 percent year-on-year in FY22,” said the government in the Survey, citing the retail and e-commerce trends report released by Unicommerce and Wazir Advisors14.

Consumers from tier II and tier III cities in the last two years led the growth in order volumes for e-commerce companies, the Survey added. Shoppers from tier II and tier III cities accounted for over 61.3 percent of the overall market share in FY22 as against 53.8 percent a year back.

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The Survey noted that the order volume from tier II and tier III cities grew at 92.2 percent and 85.2 percent YoY, almost double the pace at which orders from tier I cities grew. As per the report, order volume from tier I cities increased slower at 47.2 percent.

According to the government, the growth of e-commerce business in rural India is driven by increased smartphone penetration, internet adoption, and increased purchasing power of rural customers.

"A vast untapped rural market holds the potential for strengthening consumption growth; new e-commerce companies like Trell, Meesho, and shop 101, are expanding and gaining popularity in tier III and IV cities," it added.