An overview of E-commerce in 2021: Growth, hits, and misses
The year 2021 brought with it an array of newer opportunities & technological advancements that changed the way people shop. From being highly dependent on offline retail and local mom & pop stores to getting comfortable with the idea of eCommerce becoming an inseparable part of our lives, 2021 was a game-changer.
When we talk about the growth of eCommerce, it is impossible not to mention the ‘Covid Pandemic.’ While it was a disaster for many thriving industries, eCommerce certainly was on the other end. If you own a retail outlet and you survived the last two years, then you might have switched some part of your business to online selling or at least have found newer ways to make your product reach your customer’s doorstep.
To understand the dominance of eCommerce clearly, let’s talk about numbers. About 2 years ago, only 13.6% of sales occurred online. Today, that number is closer to 19.5%, a 45.8% increase in eCommerce market share over two years. Amazing, isn’t it?
Growth of different eCommerce categories
(1) The unprecedented rise of ePharmacies –
Over the course of the year, the online pharmacy sector has experienced healthy growth. According to a report by EY, India’s ePharmacy business is currently growing at a rapid pace and is predicted to reach $18.1 billion by 2023.
(2) Demand for Online Grocery Shopping continued
Before the pandemic, only 7% of grocery shopping took place online. Today more than 20% customers shop online, according to MasterCard. It is also expected that 70-80% of the grocery spikes will become permanent in the future.
(3) Rise of Social Commerce and newer formats
Discovery and purchase of products through social media continued to rise with the advent of players like Meesho that already clocks upwards of 2.5mn orders a day. This growth was primarily led by Tier 2 & Tier 3 cities and is expected to continue with increasing focus from ecommerce giants.
(4) Expansion of vernacular offering
Additionally the growth from Tier 2,3 cities is also being driven through vernacular ecommerce. Amazon and Flipkart continued to expand the repertoire of supported regional languages to cater to a larger base of customers.
(5) Rise of hyper local and lightening-fast deliveries
E-commerce players in 2021 have been working towards reengineering their supply chains in order to be able to provide their items to clients in the shortest amount of time feasible. 10 min delivery offered by some e-commerce platforms being the prime example of that.
(6) Biggest ever festive sales
2021 saw the biggest ever festive sales, despite a curtail on deep discounting. The positive sentiment during this season, further bolstered by the latent demand from the previous year, saw the GMV grow by 23% to touch $9.2bn.
What were the eCommerce Challenges in 2021?
In 2021 the uncertainty and hold-ups caused by the lockdown continued through the summer, and the second wave brought about an upheaval in consumer sentiment just when things were starting to look brighter. The tightening of ecommerce regulations is another aspect that has caused some amount of ambiguity in the industry, causing some changes models and strategies.
More and more brands continued to move their operations and marketing spends online. We saw a lot of activity from not just our enterprise and start-up clients, but also from more traditional brands and manufacturers. The increased online competition also brought with it an increase in customer acquisition costs for some. However, many brands achieved unprecedented growth especially in niche categories.
One thing is certain: ecommerce in India is experiencing a very exciting period of continued growth and constant innovation. Given that our ecommerce penetration is still in the single digits, there is significant headroom for expansion. Now, more than ever, is the time to evaluate, strategically plan, and build to scale your digital business for growth, in 2022 and beyond.
Read the article on timesofindia.indiatimes.com