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Home Featured

E-commerce witnessed 17% growth post COVID-19; 65% growth in Brands establishing Own website: E-commerce Trends Report by Unicommerce

by Editorial
August 20, 2020
in Featured, Market Analysis
5 min read
E-commerce Trends Report by Unicommerce
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Mumbai: Unicommerce, India‘s leading e-commerce focused SaaS platform, today released an impact report on the e-commerce industry which throws light on the performance across verticals and key trends shaping the sector. The report extensively covers trends related to e-commerce growth, region-wise consumer demand, return orders and D2C trends and how it affects the industry in the post COVID-19 world.

The report titled – ‘E-commerce Trends Report 2020’ focuses on the growth of e-commerce in India along with detailing out changing consumer behaviour and the industry response to address the newly emerging e-commerce trends. First of its kind, the report also throws light on the D2C approach and omnichannel solutions adopted by the e-commerce players, which will significantly shape the supply chain ecosystem in India, and impact the industry in the long run. Additionally, the report also touches upon the initial e-commerce recovery across different segments as we prepare to enter the post COVID-19 world and comprehends its impact on different aspects of the e-commerce ecosystem like returns, shipping, developing brand websites and technology adoption.

Key highlights of the report:

E-commerce in the post COVID-19

After the lockdown was announced, the problem of limited availability and fear of getting infected created a new shift in consumer behaviour and their buying patterns leading to a new wave of online consumers.

  • The overall e-commerce has not just recovered but witnessed an order-volume growth of 17% as of June 2020
  • The consumer buying patterns and preferences have changed significantly with categories like health & pharma and FMCG & agriculture seeing a surge and exponential growth, with the rise number of first-time online Shoppers
  • After e-commerce resumed operations post COVID-19, the return rate has seen a dip of ~10-30% depending on the category. The reduced return can be attributed to the new safety norms, increasing demand for essential products, which are generally non-returnable. However, it will be interesting to see if the trend of lower returns continues in the long term
  • There is an increasing trend of consumers buying directly from brands’ websites. Retail brands are now strengthening their online capabilities and opting for different approaches to connect with consumers
  • In the last one year, there has been a considerable growth of 65% for brands developing their own website, which led to an increase in self-shipped orders. However, the percentage of self-shipped orders declined from 35% in Feb 2020 to 30% in Jun 2020. The decline in self- shipped orders can be attributed to brands trusting marketplace logistics due to better service levels and lower unpredictability during current uncertain times.

Brands going direct to consumer

  • As the e-commerce ecosystem matures in India, there is an increasing trend of brands going directly to consumers to 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 brand’s website is increasing at much faster pace than marketplaces. Brand websites have witnessed 88% order volume growth as compared to 32% order volume growth on marketplaces
  • The top 3 segments that have seen an increasing penetration of D2C brands are Beauty & Wellness, Fashion & Accessories and FMCG & Agricultural sectors.
  • In the last one year, there has been a considerable growth of 65% for brands developing their own website, which has also led  to an increase in self-shipped orders

India’s e-commerce annual  growth pre- covid

  • India’s e-commerce sector has been on a constant growth, the e-commerce order volume saw a growth of ~20% while the GMV witnessed a surge of ~23% with an average order size of ~INR1100
  • Beauty & wellness is one sector that has witnessed an unprecedented order volume growth of ~130% followed by FMCG & agriculture and health & pharma with a growth of 55% and 38% respectively. These are emerging sectors with potential to accelerate e-commerce growth in India

Rising demand from hinterland of India

  • All leading e-commerce companies are focusing on cities beyond the metropolitan cities. Currently, Tier II and beyond cities contribute around 66% of the total online consumer demand in India and this share is expected to rise in the coming years
  • Tier III and beyond cities witnessed 53% growth, making it the fastest-growing region. It’s also observed that the top 5 cities of Tier III contribute only ~22% of the overall Tier III order volume, however in metro’s the  top 5 cities constitute 90% of overall order volume
  • The top 3 states, by e-commerce volumes, are Delhi NCR[1], Maharashtra, and Karnataka, and they constitute 65% of overall consumer demand

Return orders on decline

  • Managing returns is an integral part of running an ecommerce business. The total percentage returns (as a percentage of forward dispatches) saw 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 year[2] 
  • E-commerce companies have invested extensively to reduce COD returns as they constitute large part overall returns. The return percentage on COD orders have reduced from 27% in 2019 to 20% in 2020 and for prepaid orders, the total return has decreased from 12% in 2019 to 11% in 2020. Even after such remarkable reduction in COD returns, it’s still almost 2X returns on prepaid orders.
  • Another interesting trend observed is Tier II and beyond cities have seen a significant reduction of ~23% in overall returns. This change can be attributed to increasing, technology adoption improved last-mile delivery and customer-centric return policies.
Kapil Makhija, CEO, Unicommerce
Kapil Makhija

Commenting on the report release, Kapil Makhija, CEO, Unicommerce said, “As the world is grappling with the effects of COVID-19, the ecommerce industry in India has seen a major boost since the beginning of this year. With this report, we wanted to throw light on the enormous growth opportunity that lies for the ecommerce industry in India. With changing consumer buying patterns and preferences, rise of new first time online users, increased focus on digitisation by retailers, brands opting for D2C model etc, we are confident the ecommerce industry will emerge as the most promising market across the globe with tremendous growth potential in the future. We at Unicommerce are committed towards simplifying e-commerce selling and this report is a vital step in the same direction. Through this report, we aim to decode the changing consumer patterns, and provide detailed insights on delivery and returns so that it can help the brands and e-tailers plan their e-commerce strategy much more comprehensively.”

With e-commerce at its all-time high, Unicommerce is uniquely positioned to provide e-commerce supply chain technology cloud solutions to help industry players of all sizes to manage their business efficiently.  Established eight years ago, Unicommerce is a market leader processing over20% of India’s e-commerce volume in the country and works with leading online players across segments. The company processes 700k+ order items per day, amounting to US$ 2.5 Bn+ GMV for over 10,000 registered customers across India, Middle East and Southeast Asia.

[1]Includes NCR region: Haryana (Gurgaon, Faridabad, Jhajjar and Sonepat) and Uttar Pradesh (Gautam Budha Nagar, Ghaziabad, Baghpat).

[2] All year-on-year data points by Unicommerce are for the period of February 2020 – February 2019.

Tags: E-commerce Trends Report 2020E-commerce Trends Report by UnicommerceKapil Makhija Unicommerce

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