In the past two months, there has been a nearly 20% increase in sales across fashion, food and electronics categories, according to a recent report
By Srinath Srinivasan
Small business sales are seeing a continuous surge since August 2020 with increasing consumer spending across different retail verticals. In the last two months, there has been a nearly 20% increase in sales across fashion, food and electronics categories, according to a recent report by offline-to-online performance retail platform Magicpin.
The company also reported onboarding 100,000 new merchants across various retail verticals in the period between August 2020 and October 2020. “The trends show a clear indication that consumer spending is back on track and people are looking beyond essentials. From a merchant’s perspective, this is a clear sign that local businesses are getting more attention after the gradual unlock,” says Anshoo Sharma, CEO and co-founder, Magicpin.
The trends indicate an increase in footfall in eateries. “Within the food & beverage category, the nightlife and pub outlets are the ones seeing the sharpest recovery with customers becoming more comfortable stepping out. Some of these outlets are growing over 100% weekly,” says Sharma. Interestingly, the report shows that by the end of September, Liquor and pharmacy/healthcare retail came down by nearly 10%.
While online discovery of stores and services was a key driver, along with flexibility in payment and delivery modes, Sharma also attributes this surge to incentivising retail purchases by e-commerce and digital discovery platforms.
In certain categories like electronics, the discounts and rewards offered went past the 75% mark during various sales, like work-from-home, Dussehra and unlock sales.
“E-commerce platforms and the brands that get listed on them started giving heavy discounts across categories to encourage consumer spending. For us, it became important to not just incentivise in-store purchases, but also deliveries. In some cases, we offered additional rewards on top of what the brands may offer,” explains Sharma. This is true for over 5,000 pincodes that these merchant partners come from across metros, tier II and III cities.
“During this time, delivering on the promised RoI was important. For example, in some cases, the ratio for us stood at 1:3 and 1:5. For example, we had to deliver a business owner Rs 30 lakh worth of sales if they gave us Rs 10 lakh,” explains Sharma.
This trend is likely to go higher this month accelerated by the Diwali week, according to Sharma. “We are noticing sales double every month via our platform, going up to pre-Covid levels. This would be close to a billion dollars with all the 800,000 merchants on our platform accounted for. We expect the Diwali week alone to contribute 40% of this month’s sales, which will lead all the other weeks in the past,” says Sharma.
Large FMCG and retail brands have also shown interest in performance-driven platforms to reach consumers and with them comes a large network of distributors and retailers, which has made it easier to acquire new customers. “As we prepare the retailer ecosystem to serve online customers and orders, we expect more value to come from higher up the value chain, too, starting Diwali,” opines Sharma.