56% growth in ecommerce order volume this holiday season

Unicommerce, one of India’s largest e-commerce-focused SaaS platforms, has released yet another insightful, data-driven celebratory trend report to understand the changing dynamics of India’s e-commerce ecosystem. The report analyzes shopping trends for the festival months 2019 and 2020. The period for the analysis is 30 days before Diwali with a sample size of over 44 million orders.

This festive e-commerce industry reported a 56% growth in order volume compared to last year’s festive season*. The increasing order volume also resulted in a 50% growth in GMV compared to last year’s holiday season.

Consumers have become more value conscious than they used to be and are now shopping in new categories. The rise of new categories such as personal care and beauty products and higher sales of lower value products have resulted in a 4% drop in average order value compared to last year’s holiday season.

This was the first festive season after the pandemic swept the world earlier this year, and the report goes deep into the industry-related growth, increasing consumer demands from “Bharat” and tries to understand the new consumer behavior. The report also decodes some interesting facts about the growth of branded websites and companies that are getting serious and focusing on the D2C business model.

What India has shopped for during the festive season

• One of the most promising signs for the e-commerce industry is the rising number of first-time online shoppers and the emerging categories. The personal care category emerged as the biggest winner with ~176% growth in order volume over the last month of Christmas. Beauty and wellness is another category that saw order volume growth of ~52% compared to last year’s holiday season
• As people plan to travel and meet families during the festive season, the number of consumers indulging in fashion shopping during the Diwali sale is increasing significantly. This festive season, fashion and accessories category saw order volume growth of 71% compared to the same month last year, which is above the industry average
• The electronics segment continues to be the highlight of the holiday sales as all marketplaces offer extensive discounts and deals on electronic products. The segment saw significant growth in order volume of 65% compared to the 2019 month-end
• Returns continue to be a problem for e-tailers across India. Automation and increasing consumer awareness are leading to a steady decline in returns. This holiday season, the industry as a whole has seen a 35% drop in returns orders compared to last year. The fashion and accessories category moves on to the maximum returns category

Brands focus on D2C

• This year we’ve seen brands get serious about selling online, with the number of brands developing their own websites steadily growing. Post lockdown, brands have started adopting technology solutions to improve business efficiency
• This holiday season, not only marketplaces but also branded websites have reported huge growth in consumer demand. Big brands have now committed to selling through their own websites. The branded websites saw order volume growth of ~77% compared to a 60% order volume growth in the marketplace
• It is interesting to note that despite differences in order volume growth, there is a slight difference in GMV growth between branded websites and marketplaces. GMV for branded websites increased by 48%, while GMV for marketplaces increased by 50%. This means that brands have been offering more discounts on their own websites than on marketplaces to attract more customers. This also resulted in a significantly lower average order size on branded websites. The average order size on the brand’s website fell by 16%, compared to a 5% drop on the marketplaces in last year’s celebration month

Increasing number of buyers from Tier II and Tier III cities in India

• Tier II and Tier III cities have grown much faster than metros, and their impact can also be seen in the holiday sale. Tier II cities and beyond have seen growth of ~99% compared to last year’s holiday season. Tier I and metropolitan growth remains at around 20%
• The contribution of Tier II and beyond cities is growing exponentially. In this festive season, Tier II and beyond cities of India contributed over 59% to India’s online consumer demand, while traditional metropolitan areas and Tier I cities contributed around 41% to total online retail
• Metropolitan states continue to be the dominant states, with Delhi, Maharashtra and Karnataka being the biggest drivers of e-commerce. These three states combined account for about 55% of India’s e-commerce volume in the celebration month

Regarding the holiday report, Kapil Makhija, CEO of Unicommerce said, “The holidays are the most important and opportunistic time of the year for the e-commerce industry. However, this festive season has been particularly special as the world continues to grapple with the impact of the pandemic.

“In this festive month we have seen e-commerce grow beyond expectations and it is interesting to see how emerging categories such as personal care and beauty and wellness continue to grow during the festive season.

“With consumer demand for branded websites increasing, brands are now turning to D2C and offering great deals to attract more consumers. We are confident that the e-commerce industry will continue to gain growth momentum in the coming years as the number of buyers from Tier II and Tier III cities increases.

“This report is another step in our ongoing effort to provide valuable insights into the e-commerce industry and help sellers simplify e-commerce selling.”

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