E-commerce Grows by 36% in Last Quarter in India: Report

In India, the volume of e-commerce orders increased by 36% in the last quarter of 2020, with the Personal Care, Beauty and Wellness (PCB&W) segment being the largest beneficiary, according to a report.

The volumes of the PCB&W and FMCG & Healthcare (F&H) categories increased by 95% and 46% YoY respectively from October to December 2020, according to the Q4-2020 -E-commerce Trend Report, jointly released by Unicommerce and Kearney.

According to the report, Tier II and III cities accounted for an incremental volume and value growth of 90% YoY.

The report evaluates the growth of e-commerce with a sector-wise review. It recorded 94% volume growth in the fourth quarter of 2020 compared to the same period last year. In terms of order volume and gross merchandise value (GMV) respectively, e-commerce increased in the last quarter of 2020 by 36% and 30% YoY.

As per the report, due to restricted movements imposed by COVID-19 lockdown, online sales growth accelerated, and the results of lockdown led to a major shift in consumer preferences with many new shoppers and sellers coming online.

In addition to the 27% YoY volume increase, the electronics segment experienced 12% YoY growth in average order value (AOV).

The largest category by volume continues to be apparel and accessories. It reported 37% YoY volume growth in the fourth quarter of 2020. The growth of the segment is driven by the sale of lower-value commodities such as comfort wear and loungewear.

The lockdowns and hesitation to move out resulted in many first-time online grocery shoppers, making it an important category to specifically concentrate on and promote the grocery market for mainstream e-commerce players such as Flipkart and Amazon.

Tier 2 and Tier 3 cities recorded substantial increases in the share of the total volume share of e-commerce sales increased by 46% YoY and the share of value increased to 43% YoY in the fourth quarter of 2020.

As per the report, FMCG & Healthcare was the fastest growing category with 150% growth in Tier I and metropolitan in the fourth quarter of 2020.

Mr. Kapil Makhija, CEO of Unicommerce, said, “Since March 2020 when the lockdown was announced, the impact of the COVID-19 pandemic has been widely visible ever.”

He added that the e-commerce sector has emerged as the pillar of the retail industry and the enormous opportunity that e-commerce presents has been realised by small and big businesses.

Mr. Siddharth Jain, Partner, Kearney, said, “The category of Personal Care, Beauty & Wellness is an important segment of online growth, as it saw a phenomenal volume growth of more than 95% in the fourth quarter of 2020 compared to the same period last year.”

He said, “The markets of Tier II and Tier III+ have shown maximum capacity for growth, outpacing that of Tier I cities. These cities accounted for a whopping 90% YoY of incremental volume and value growth in the fourth quarter of 2020.”