How has the Indian shopper’s e-commerce cart evolved in the last four months?

E-commerce platforms like Flipkart, Amazon and Snapdeal are among the fastest to bounce back from the Covid meltdown. But what’s charging it and will it sustain?

The phenomenon of consumers staying indoors due to the Coronavirus pandemic has been bad news for most sectors. But as far as online retail goes, it has been a different story altogether. Despite the easing of lockdown restrictions, consumers, many of whom are working from home, are still hesitant to venture outside.

Recently, there was news that e-commerce platforms have recovered almost 90 per cent of their pre-COVID order volumes. This makes e-commerce the fastest (sector) to recover among sectors like offline retail, hospitality, restaurants, automobiles, real estate, among others. However, the average transaction value has decreased by around 25 per cent.

The lockdown and its immediate impact on the supply chain had crippled e-commerce. We take a deep dive into the sector to dissect the various movements.

According to a report by India Brand Equity Foundation (IBEF), a trust established by the Ministry of Commerce, online retail will account for five per cent (or $42.5 billion) of the $850 billion Indian retail market by the end of the year. Almost all the platforms tried to pacify the impact of Covid with seasonal sales events.

Almost 90 per cent of the sellers on Flipkart have resumed operations. This has led to the reactivation of almost 85 per cent of the platform’s product catalogue. It was only delivering ‘essentials’ during the lockdown period.

Snapdeal’s sales volume are back to pre-COVID levels. The recovery has been faster in smaller towns in terms of order volumes. This is likely due to the limited availability of products in offline stores due to supply chain disruptions.

According to Unicommerce, a SaaS platform that works both with sellers and e-commerce platforms, categories like FMCG, grocery and personal care, which were earlier comfortable with offline retail, have seen a significant spike in online movement. Electronics and fashion (apparels) have, since March 2020, been replaced by essentials (groceries and personal care) as the most popular categories for retailers.

Unicommerce helps manage around 20 per cent of the e-commerce volume in India across platforms like Myntra, Nykaa, Flipkart, Amazon, among others.

The average cart size has decreased by around 25 per cent for fashion and accessories. The popular products in the category are nightwear and comfortable home wear. Brands operating exclusively in kids wear have seen a 100 per cent growth.

The average cart size for electronic appliances has decreased by around 5-10 per cent. The eyewear and beauty products segments have also shown initials signs of recovery. The recovery rate for eyewear brands stands at around 70 per cent, while it is over 60 per cent for cosmetic and beauty products. The cart size has remained consistent to pre-COVID level in both the segments.

While the immediate spike in sales was caused by pent-up demand, it is likely that the run will continue due to work from home and the fear among consumers of catching Coronavirus if they venture outside.

“Remote working is expected to be the ‘new normal’. While consumers across the country are shopping for essentials, they are also looking for other categories to meet their work, study and entertainment requirements. We have witnessed a nearly 3x increase in demand for work from home essentials such as study tables, office chairs, laptop tables, etc., as organisations extend the work from home tenure for their employees,” says a Flipkart spokesperson.

Mobiles, laptops in the mid-premium segments and refurbished laptops on Flipkart 2GUD have seen increased search (from consumers) across the country.

Easy-to-eat food items have also garnered a lot of consumer demand and interest. The top variants are ready-to-eat meals, which have seen a growth of 125 per cent, followed by noodles and pasta, with 40 per cent, and breakfast cereals, chocolates, ketchups and spread, among others.

The demand for smart kitchen and home appliances has almost doubled, with significant increase being witnessed for dishwashers, vacuum cleaners, microwaves, etc.

Consumers have turned their home space into gyms to keep their fitness regimes intact. They are searching for fitness equipment and ‘athleisure’ (wear) as they continue to stay indoors.

Flipkart also saw an increase in demand for products such as yoga and lounge pants, sports bras, T-shirts and sports shoes. Fitness products such as yoga mats, cycles, treadmills, badminton racquets, dumbbells and other support equipment have also witnessed growth on Flipkart in the last few months.

Snapdeal ventured into new categories like groceries, e-learning, health checkups, etc. Categories like home and apparel are back to pre-COVID levels, while new categories related to personal safety and health are driving sustained volumes. Immunity boosting products and masks have seen healthy growth. The platform is also witnessing higher conversions as growing number of users favour value-conscious purchases.

Major demand is driven by Tier II and Tier III markets, like Agra, Bhopal, Dehradun, Jalandhar, Kanpur, Lucknow, Jaipur, Patna, Raipur, etc.

Around 75 per cent of the shoppers on Snapdeal opt for seller-branded products (which come at a lower price), instead of popular brands. The apparel category accounted for nearly 40 per cent of the products sold in May.

There is a 25 per cent jump (over last year) in the sale of kitchen items in the last two months since the lockdown. There has also been a surge of 50 per cent in the sale of baking items such as baking trays, cookie cutters, silicone spatula, and cupcake trays.

Earphones and headphones are the topmost buys, followed by laptop tables, home printers, and Wi-Fi routers. Mobile chargers, data cables, and extension cords are also in high demand. The demand for laptops, tablets, mobiles, and tech accessories is up 2x since the beginning of the lockdown.

“In addition to this, we have witnessed growth in new categories such as fitness products and gym equipment and gardening. Personal hair grooming products are other popular items. We expect the demand in these segments (mentioned above) to increase further,” a Snapdeal spokesperson says.

Snapdeal tied up with dealers in local grain markets, mandis, kirana stores, medical equipment space, as well as FMCG wholesalers across cities to source essentials. It partnered with Medlife for medicine orders, health check-ups and diagnostic tests. The platform also joined hands with various e-learning platforms like Toppr, Toppers Exam, Gradeup, etc.

It is not the consumers alone who are leaning on e-commerce. Offline retailers are also trying to locate their customers online. Kapil Makhija, CEO, Unicommerce, says that there is a significant increase in the number of retailers and brands going online.

Unicommerce has witnessed a 400 per cent surge in queries from offline retailers. The numbers of queries from retailers in Tier II and Tier III cities has also seen a massive jump.

Makhija says that major FMCG players, who were earlier comfortable with a conventional supply chain model, are now adopting omnichannel and D2C platforms to sell directly to consumers. Large e-commerce players are also looking for warehousing facilities in smaller cities.

“We are also seeing interest from categories like real estate, which were previously unheard of in e-commerce,” Makhija signs off.

Mattress brand Sleepwell decided to put more muscle behind its e-commerce presence. E-commerce contributes only 3-4 per cent of the sales in the entire mattress industry.

“Our institutional business scaled up rapidly with the supply of beds to COVID centres etc., but offline retail, which does the bulk of our business, was completely washed out. While our own marketplace is seeing good traction, we also launched MySleepwell.com, an omnichannel site,” says Sumit Sehgal, CMO, Sheela Foam.

“People don’t like buying a mattress online because they like to feel it beforehand. So, while the item can be ordered online from the site, customers can also visit a dealer and check the product and (then) order online. That way the offline dealer also gets a commission. The dealer will only facilitate the sale, but the delivery is taken care by the brand,” Sehgal added.

Another major change that took place in the online retail space was the entry of alcohol as a category on e-commerce. Platforms like Amazon, Swiggy, BigBasket and Zomato initiated alcohol deliveries in states like West Bengal, Odisha and Jharkhand.

“The emergence of new avenues like e-commerce and home delivery of alcohol is a welcome move for our industry. Such agile innovations and strategic pivots can go a long way towards helping businesses grow and thrive in a rapidly-changing landscape,” says Sanjit Randhawa, managing director, Bacardi India.