E-commerce in India grows by 36 per cent in last quarter

E-commerce order volume growing by 36 per cent in India with Personal care, Beauty and Wellness (PCB&W) segment being the biggest beneficiary, according to a report.

In the October to December 2020 period, PCB&W and FMCG & Healthcare (F&H) categories’ volumes grew by 95 per cent and 46 per cent year-on-year (YOY) respectively, said the Q4- 2020 -E-commerce Trends Report’, released by Unicommerce and Kearney.

Tier 2 and 3 cities accounted for a 90 per cent YOY incremental volume and value growth, it said.

The report, which assesses the e-commerce growth in Q4 2020 with the sector-wise analysis, said brand websites reported a 94 per cent volume growth in fourth quarter of 2020 as compared to same period last year.

The last quarter of 2020 saw e-commerce grow by 36 per cent and 30 per cent YOY in terms of order volume and gross merchandise value (GMV) respectively, while theaverage order value declined by five per cent in Q4-2020 as compare to same period last year.
The e-commerce industry had reported a 26 per cent order volume growth in Q4-2019 vis-a-vis Q4-2018.

The growth accelerated in light of COVID-19 and the effects of lockdown led to a massive change in consumer habits with many new shoppers and sellers coming online, the report said.

Electronics category witnessed 12 per cent YOY growth in average order value (AOV) in addition to 27 per cent YOY growth in volumes.

Fashion and accessories continue to be the largest segment by volume.

It reported 37 per cent YOY volume growth but AOV declined by seven per cent YOY in Q4-2020 as compared to the same period last year.

With people still working from home, the growth of the category is supported by the purchase of lower value products such as comfort wear and loungewear, the report said.

The lockdowns and reluctance to venture out resulted in many first-time online grocery shoppers, making it an important category for mainstream e-commerce players like Flipkart and Amazon to actively focus and promote the grocery business.

Tier 2 and Tier 3 cities reported significant gains in share of overall e-commerce sales volume share grew to 46 per cent from 32 per cent and value share grew to 43 per cent from 26 per cent during the Q4 CY2020 as compared to the same period last year.

FMCG & Healthcare is the fastest growing category in Tier I and metropolitan with 150 per cent-plus growth, said the report, which covered trends related to the overall e-commerce growth, region-wise consumer demand and direct-to-consumer (D2C) trends and how it affects the industry in the post COVID-19 world.

CEO of Unicommerce, Kapil Makhija said the impact of the COVID-19 pandemic has been widely visible ever since the lockdown was announced in March last year.

The e-commerce industry has emerged as the backbone of the retail industry and small and big players have realised the immense potential that e-commerce holds, he added.

Partner, Kearney, Siddharth Jain, said, “The Personal Care, Beauty & Wellness category is an incredibly interesting area of growth online, as it has seen stupendous volume growth of over 95 per cent in Q4-2020, as compared to the same period last year.”

“Tier II and Tier III+ markets have shown maximum growth potential, outpacing that of Tier I cities. During the quarter in review, these cities accounted for a whopping 90 per cent YOY incremental volume and value growth,”” Jain said.