E-Commerce registers 31 pc growth in Q3 2020 vs Q3 2019

Post the lockdown has been lifted across the country, this was the first quarter in which businesses were operational in the majority part of the country.

Hence, the report analyzes how e-commerce fared in this quarter as compared to the same time last year.

The report also sheds light on the performance across all the major product categories, region-wise consumer demand, rising D2C trends and reducing returns.

The surge in demand due to the pandemic continues to drive order volume for e-commerce players in India.

The e-commerce industry witnessed an order volume growth of 31% for Q3 2020 (July-September), as compared to the same period last year.

The e-commerce industry  is growing faster than anticipated and has already shown 1.5X growth compared to last year.

As per the report, while the order volume has increased significantly, the corresponding GMV has increased only by 24% due to 5% decline in the average order value. While people are ordering more online, consumers are getting value conscious, and ordering lesser value products.

In addition, the overall category mix is changing due to high growth of personal care and health & pharma categories driving the overall average order value down.Some of the key trends are as follows:

Tier II and Tier III cities driving growth

The huge growth of e-commerce is driven by consumers living in Tier II and Tier III cities of India. The increasing focus on regional markets and the rising adoption of smartphones is driving growth from Tier II and beyond cities. The Tier III and
beyond cities have showcased a growth of over 90%, and is almost double the growth recorded in the Unicommerce annual report released in August.

While Tier 3 may be rising as most of the workforce may have gone back to their home towns, but as they begin to come back to their work locations, we may see higher growth in Metropolitan and Tier-1 cities in the months to come.
New emerging product categories

The overall e-commerce growth has shown a great sign, with newer product categories driving high growth, particularly personal care with over ~100% order volume growth and health and pharma with ~75% growth.

However, these categories still hold a very small share in the overall e-commerce volume and will continue to grow at a much faster pace for a few quarters. The electronics and fashion continue to be the biggest category with the maximum share of order volume, although they have lower growth (For example, fashion and accessories segment has demonstrated ~30% order volume growth).

The product mix has also changed substantially across most of the categories for example: in fashion and accessories-women’s topwear and mens shirts were the most ordered items in Q3 2019 and now face masks and womens' kurtas along with loungewear items such as track pants and nightwear are the most ordered products. Similarly, in the personal care segment, Face/body wash, face scrubs and creams were the popular products in Q3 2019, now these products have been replaced by more of organic and self grooming products, female grooming products, serums and disposable cutting capes owing to the majority of people still reluctant to go to a local parlor/salon.