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E-Commerce Trends in India in 2020

A recent NASSCOM Insights report says that the Indian e-commerce market grew 20% and makes up less than 5% of the overall Indian retail market. With the second-largest internet user base in the world, Indian e-commerce market has a strong growth potential. The pandemic might well be a turning point in the Indian e-commerce story and superior user experience is expected to play a crucial role in further growth.

Post Pandemic Direct to Consumer E-Commerce Growth

The e-commerce sector was growing steadily before the pandemic, but it has accelerated the shift to e-commerce. Traditional wholesalers and retailers have realized the importance of selling directly to consumers (D2C) as there has been an exponential rise in the number of new online shoppers. Brands are focusing on developing a community for their customers to forge stronger relationships. The number of consumers shopping directly from websites has grown 88% versus 32% growth on marketplaces. Beauty and Wellness, Fashion and Accessories, and FMCG and Agricultural segments are the top segments for an increasing number of D2C brands. The share of D2C platforms in overall e-commerce is expected to grow significantly in the next few years.

Indian E-Commerce Growth Segments

According to the NASSSCOM report, Fashion and Accessories segment is the most popular segment for online shopping with the highest share of order volume. The Beauty and Wellness segment witnessed a 130% growth in order volume followed by the FMCG, Eyewear, and Health and Pharma segments. Health and Pharma and FMCG and agriculture segments have witnessed exponential growth due to a large number of first-time online users. Electronics segment is the largest segment in terms of GMV.

Rising demand from Tier-3 Cities

Expanding beyond metro cities had been a rising trend over the past few years. This year, Tier-3 cities were the fastest growing regions with over 53% growth. Tier-2 cities account for 67% of total online demand and are expected to increase their share in 2021.

Declining Number of Return Orders

Return management is critical to the profitability of an e-commerce business and technologies like Augmented Reality and 3D modeling have helped reduce the number of returns. Returns percentage has declined 13% and constitutes 17% of the overall order volume compared to 20% in 2019. Apparel Fashion is the category with the highest returns. Personalised one-on-one or one-to-many interactions over live video can help in significantly reducing the number of returns. Know more about how ShopConnect can help you achieve this.