India: E-commerce sees a sectoral comeback: Nielsen

16 Dec,2020

By A Correspondent

 

Products that cater to the consumer need for convenience while adapting to the homebody economy dominated the festive sale period in India (Oct. 15 – Nov. 13, 2020), according to measurement giant Nielsen.

 

With the need for communication and increased media consumption, mobile phones and accessories (e.g. earphones, headsets, case covers, etc.) continued to account for over half of e-commerce sales during the festive period. While notably, electronics (e.g. laptops, printers, peripherals) increased its share by 10% compared to 7% during the festive season last year (Sept. 28 – Oct. 25, 2019) given the increase in remote working and schooling.  See chart below.

 

Nielsen India’s E-commerce Consumer Panel (E-Analytics Solution) helps measure consumer behaviour across more than 30 E-Commerce platforms, finds double digit increase in average spend of online shoppers for electronics and accessories (39%), mobile and accessories (12%), and fashion, including apparel, footwear, and accessories (10%). Appliances (e.g.TV, WM, refrigerators, etc.) also saw notable shopper spending increase at 9%.

 

Said Kunal Gupta, Head, Consumer Intelligence, Nielsen, South Asia: “Consistent with the trends that we are seeing globally, consumers in India are fitting into the homebound behaviour. Triggered by the desire to make life and work easier and more convenient at home, we see a significant increase in shopper spend in categories that are perceived to cater to homebody needs on account of the pandemic.”

 

Geographically, the growth of e-commerce during the festive period is led by Bharat (<10 lakh population towns). Nielsen reports a 16% increase in orders from smaller cities (<1 lakh population towns) and a 14% rise in shopper spends from >1 lakh+ population cities. This clearly shows the evolution of the shopper spend journey through urban classes.

 

Added Vaughan Ryan, Nielsen’s Consumer Intelligence managing director in Asia: “Manufacturers and retailers in multiple markets such as China, the Koreas and South East Asia have long recognised the affinity of consumers to online shopping during popular festivals. The behavior of waiting and saving up for the big festival online sales have clearly turned into a consumer habit. It doesn’t come as a surprise that manufacturers and traditional retailers have online sales promotions on their own or have partnered with online platforms to get products faster to more consumers.”

 

FMCG continues to record the highest orders during festive sales with 35% unit share. Looking at FMCG sales over the last 14 months, FMCG sales are higher during the festive period this year versus the pre-COVID period and matches the same level during Republic Day sale in January this year.  New FMCG shoppers have been enticed to shop online for the first time during the festive period in 2020, and with shopper penetration remaining high at almost 20% in the festive period for the year. An uptick from 14% in 2019, indicates that more consumers were persuaded to shop online for FMCG.

 

 

“We see the gradual recovery of FMCG online from April when consumers were mostly buying essentials online and there were supply and delivery issues. The Big Day Events which usually happen during festive sales in August and October helped accelerate the recovery of FMCG,” added Gupta.

 

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