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Executive Summary


India’s e-commerce growth

India’s e-commerce sector grew by 20% in the last one year. The electronics segment remains the biggest sector with a maximum share of GMV. However, fashion and accessories is the most popular segment amongst consumers, with the highest percentage of order volume during the same period. The Beauty and Wellness segment became the fastest growing sector with 130 % growth in order volume, followed by the FMCG, eyewear and Health and Pharma sectors.

Rising demand from hinterland of India

All leading e-commerce companies are focusing on beyond metropolitan cities. Currently, Tier II and beyond cities contribute around 2/3rd of the total online consumer demand in India and this share is expected to rise in the coming years. The aspirational young Indian consumer in these cities is driving growth for the sector. Tier III and beyond cities witnessed
53% growth, making it the fastest-growing region.

Brands going direct to consumer

Companies with strong online presence are establishing their website to develop a direct connect  with consumers and offer a great experience to its patrons. While the brands have created their own website, the brands continue to sell on the marketplace as it still drives the majority of the order volume. The number of consumers shopping directly from the website has witnessed a growth of 88% as compared to 32% growth on the marketplace. The top 3 segments that have
seen an increasing penetration of D2C brands are
Beauty & Wellness, Fashion & Accessories and FMCG & Agricultural sectors. Considering the rising number of brands establishing their own website, the share of D2C platforms in overall e-commerce will increase significantly in the coming years.

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Return orders on decline

Managing returns is an integral part of running an e-commerce business. The total percentage returns (as a percentage of forward dispatches) has seen a decline of ~13% as compared to last year and it constitutes ~17% of the overall order volume as compared to ~20% in the previous 5 year
1. Fashion Apparel is the category with the highest returns.

E-commerce in the post COVID-19 world

A pandemic hit the world, and it has exponentially changed the way we live. It has given a significant boost to India’s e-commerce and it will be considered as a major turning point for the country’s e-commerce ecosystem. It’s not surprising that e-commerce has not only recovered but have grown by 17% as compared to pre-lockdown order volume. The consumer buying patterns and preferences have changed significantly, categories like
health & pharma and FMCG & agriculture have seen a surge and exponential growth, with the rise of a large number of first-time online users. The retail brands across the world are now strengthening online capabilities and opting for different approaches to connect with consumers. We can expect to see increasing adoption of omnichannel solutions as a result of this. There will be increasing digitisation by brands across multiple categories leading to the improved shopping experience for consumers. It will be interesting to see which habits and patterns of the pandemic-life continue and how these
evolve as we step into the post COVID-19 world.

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