Small cities dominate e-commerce platforms’ festival sales: Industry players | The Financial Express

Small cities dominate e-commerce platforms’ festival sales: Industry players

Tier 2 and beyond cities were at par with metros and Tier 1 cities with around 50 per cent contribution in gross merchandise value during the festive sales by the online players last year, according to Redseer Strategy Consultants

Small cities dominate e-commerce platforms’ festival sales: Industry players
According to Redseer, mobile as a category continued to lead the Gross Merchandise Value (GMV) share, contributing 41 per cent of the total.

Small cities dominated the festival season sales of e-commerce platforms accounting for around Rs 24,000 crore or around 60 per cent of the total market share in value terms, according to industry players.

The figures are for the recently-concluded festival sales wherein e-commerce players had offered significant discounts on various products.

Tier 2 and beyond cities were at par with metros and Tier 1 cities with around 50 per cent contribution in gross merchandise value during the festive sales by the online players last year, according to Redseer Strategy Consultants.

The consulting firm said that e-commerce firms are estimated to have registered a 27 per cent growth and clocking sales worth Rs 40,000 crore. Flipkart Group accounted for around 62 per cent of the total market share in terms of Gross Merchandise Value (GMV).

Major e-commerce players such as Flipkart, Amazon, Meesho and JioMart have seen more than 60 per cent of the customers being from Tier 2 and beyond cities during the festive season sale week that ended on September 30.

“Meesho’s value proposition has enabled us to cater to growing demand in Tier 2 plus markets and we saw that continue during the festive season as well. During the five-day Mega Blockbuster Sale, about 60 per cent orders come from Tier 4 markets,” Meesho’s Business CXO Utkrishta Kumar said.

JioMart, which started ‘Tyohaar Ready Sale’ on September 23, said that it registered 60 per cent sales from Tier 2 and beyond cities.

“The response has been good in metro regions. However, the smaller cities and towns in the non-metro regions are driving sales this season. More than 60 per cent of our sales are from Tier 2 and beyond,” a JioMart executive told PTI.

“Our disruptive pricing, exclusive discounts and promotions have led to approximately 3 times increase in app installations. Over 50 per cent of sellers have witnessed a 2 times increase in sales and top sellers have witnessed a 5 times increase in orders,” the executive said.

According to Redseer, there has been about 3 per cent increase in average spend per shopper during the 1st week of festive season sale and the growth was driven by new users.

Flipkart said that to woo customers from Tier 2 and beyond cities, it has sent out more than 150 million personalised and curated WhatsApp messages.

“38 per cent of these customers visited the app to know more,” Flipkart said.

Amazon spokesperson said that in the first two weeks of the Amazon Great Indian Festival (GIF), around 75 per cent shopped on Amazon India.

“We also saw more than 85 per cent of all new customers coming from Tier 2-3 cities during the first 2 weeks of GIF,” the spokesperson said.

Redseer Strategy Consultants Associate Partner Sanjay Kothari said the next phase of growth always comes from Tier 2 and below cities. That phase has now matured. Four to five years back, Tier 2 plus towns used to contribute around 40 per cent during festive season sale.

“The advent of Jio has completely democratised the internet. With cheaper access to data, people have been able to freely use the internet and shop online. Smart phone penetration has gone through the roof and covid acted as catalyst in adoption of online shopping,” he added.

Further, Kothari said Tier 2 and below towns jointly contributed around 40-45 per cent in 2018-19 but now it has doubled in terms of actual value and is contributing around 60 per cent on a growing basis.

According to Redseer, mobile as a category continued to lead the Gross Merchandise Value (GMV) share, contributing 41 per cent of the total.

On the other hand, fashion contributed to 20 per cent of GMV, which grew 48 per cent Y-o-Y from last festive season.

Software-as-a-Service firm EasyEcom, which focusses on omni-channel inventory and warehouse management and reconciliation tools, said that fresh food, organic produce in particular, and FMCG-related products saw a three times surge in the number of orders during festival sales in Tier 2 and 3 cities.

“The consumer electronics and home appliances segment outperformed any other category in terms of the total value (GMV). Bluetooth earphones, smart watches and mobiles top the list in terms of GMV, clocking close to 20 per cent YoY growth from Tier 2 and Tier 3 cities…,” EasyEcom Founder and CEO Punit Gupta said.

Also Read: PROWL by Tiger Shroff launched on Flipkart

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First published on: 10-10-2022 at 19:16 IST