Covid gives major boost to small players in online retail

NEW DELHI : India’s online retail market, dominated by electronics and clothing until the coronavirus outbreak, has seen tremendous growth in other smaller and emerging categories since then, according to a new report.

According to Unicommerce, a supply chain-driven SaaS technology platform focused on e-commerce, fast-moving consumer goods, beauty and personal care products, health and pharmaceutical items, home decor and sports equipment is one of the categories that find new buyers online.

Unicommerce analyzed online shopping from January to August 2021 and last year with a sample of over 40 million orders for its Emerging E-commerce Segments 2021 report, which highlighted segments that had an online presence. limited before the pandemic but which have increased over the past 18 months.

Most of the sales of these emerging categories came from Tier 1 cities, Unicommerce said. “Before the pandemic, these emerging categories held only a very small portion of overall e-commerce activity, with limited consumers; therefore, the market share split between Tier I, Tier 2 and Tier 3 cities was almost even, ”he said.

However, the market shares of these categories changed significantly in 2021, with Tier 1 cities accounting for over 160% growth for these emerging segments with a 52% market share contribution.

The pandemic’s boost to online sales is known; However, the closures have also helped increase demand for categories that were previously purchased at large retail chains and unorganized retail stores.

Electronic commerce in India has traditionally been dominated by electronics, cell phones, clothing, and footwear. In FY20, e-commerce accounted for 26% of overall consumer electronics sales. For food and groceries, the corresponding figure was only 0.5%, according to a Technopak report published in September 2020.

Unicommerce data showed that Consumer Staples (FMCG) volumes increased 74% year-over-year between January and August 2021, while beauty and personal care products registered 143%. , the highest of all emerging segments.

“The FMCG e-commerce sector saw a major spike at the start of the lockdown and it was seen as a temporary phenomenon given the conventional nature of the industry, and consumers were expected to revert to the old ways of buying after a while. time. Today, even after 18 months, the FMCG segment continues to grow at a rapid rate, ”he said.

Kapil Makhija, CEO of Unicommerce, said the pandemic has changed consumer buying habits and accelerated the adoption of technology among brands at a faster rate.

The growth of these categories is also marked by consolidation and competition in the market.

The pandemic has also accelerated the growth of the beauty and personal category, driven by face care and hair care products.

“New age digital businesses have been able to effectively respond to growing consumer demand with an automated supply chain and digitizations across different cycles of operation,” Unicommerce said. The pandemic has also attracted new buyers to the category.

The healthcare and pharmaceutical industry has also grown, as the pandemic has increased demand for wellness and immunity-boosting products. The healthcare and pharmaceutical sector continues to grow and saw order volume growth of 119% in January-August 2021, compared to the same period last year.

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