Among all the sectors which was impacted by Covid, e-commerce showed the most resilience and recovered strongly after the pandemic. More fundamentally, consumer perception and behaviour changed toward retail and many newer facets of the industry started strongly growing as a result of the pandemic.
Redseer captured the emerging trends in e-commerce that played a key role in its recovery:
Steep rise in online penetration across categories
It has recovered stronger with more penetration across categories whille retaining users on the platforms. Overall, there has been a step rise across categories in online penetration. Categories like mobiles, electronics, home and fashion have seen a significant increase.
Tier 2+ Shoppers were >50% of online user base
The recovery was mostly led by the rise of tier 2 shoppers. This indicates the deeper penetration of the online players across e-tailing which has also been a major reason for faster recovery. A stark contrast from the other years, tier 2+ shoppers were >50% of the online user base for the first time in 2020.
E-tailing to reach $140B GMV and 11% of retail by 2025
With the Covid boost, e-tailing is expected to reach $140 billion GMV and 11% of retail by CY2025F which is a 30% increase from CY21F.
Within E-tailing, non-traditional models to see strong growth in 2021
Adding up these facets, it can be concluded the non-traditional e-tailing models will see stronger growth in CY21. These channels include omnichannel, social commerce, D2C brands, horizontals and verticals. Over the last few years, social commerce has been emerging as one of the significant areas of e-tailing. While social commerce retailers more than doubled in CY20, compared to CY19, social commerce suppliers grew from 30k to 50k.
Direct-to-consumer and digitally native brands also saw an exponential growth in 2020 and now accounts for 30% e-commerce sales.
By CY25, verticals will have a significant share in fashion & grocery
According to our research, horizontal will be leading in electronics while vertical will grow significantly in fashion and grocery while omnichannel and D2C will also grow.
It is clear that in the long run, the non-traditional e-tailing models along with deeper penetration across categories will make a huge contribution in the growth of the e-tailing and overall retail in India.