As the festive season comes to an end the e-commerce sector hits $9.2 billion worth of gross merchandise value (GMV) this year.
After struggling through the gruesome one and a half years of the ongoing pandemic, the Indian consumers have finally opened their purses to their full capacity.
Not only has this sector hit the record, it also saw an increase of 23% compared to last year.
The reason behind this hike is the arrival of new players into the field, such as Meesho, Reliance and Tata Cliq. In front of the new and the existing competition, Amazon and Flipkart also increased their efforts to make up.
The shift from concentrating on the two e-commerce platforms to new ones is a sign of a healthy market. During the festive events, the brands also participated aggressively.
They all know Indians prefer to buy new things during auspicious days, especially during the festival seasons of Navratri and Diwali. As a result, the players went all in and the consumers responded with good trade.
Unlike the previous seasons, this season’s sales were driven by tier-2 and tier-3 cities. The reason for this trend is that the inhabitants of these regions are accustomed to the e-commerce environment.
Amazon claims that, after their Great Indian Festival, 79% of their new customers are from tier-2 and 3 cities.
Also, one out of two users of Prime is from these regions, which could also translate to Indian filmmakers’ preference for Amazon’s streaming service.
The change is visible in product categories too. Mobile took the place for the category with the most demand, with a rise of 41%. The second place goes for fashion and apparel with 23%.
2021 also witnessed a fall in Cash-on-Delivery (COD), and an increase in usage of UPI. This benefits the e-commerce players as it reduces the risk of a last-minute cancellation. But the consumers prefer COD for their first use.
Even existing users have moved to cards, UPI and BNPL. Even though COD is still in use there is an increasing preference for the others.
There is an all-around spike in the e-commerce field. The number of sellers has grown. The number of first-time sellers from tier-3 cities rose 213%.
Compared to 2020, where only 16,000 new sellers joined from this category, 2021 saw 47,000 of them joining.
While tier-1 saw an increase of 138%, tier-2 saw an increase of 175%. The festive season was a time for robust change and development for the local sellers and MSMEs, who used the better logistics to their advantage.
The improved distribution and alternative payment options also helped the consumers. Another factor that helped the sellers is expanding cloud services, with many firms expanding their capacity by three times.
The Diwali season is over, and the new variant poses a risk but that doesn’t discourage the market from embracing the winter and Christmas sale.
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