The gigantic rate of cash burn and the mounting losses for billion-dollar e-commerce companies such as Flipkart and Amazon India seems to be benefiting India’s e-commerce sector after all. Advisory firm RedSeer Consultancy has found that the online retailing industry had a very positive OND-quarter (October-november-december), with the gross merchandise value (GMV) touching nearly $20 billion.
The study states that this development is primarily driven by the increase in the number of shoppers from tier 2 cities and beyond. A press release from RedSeer Consulting says,
Going forward, we feel that these new shoppers who have found value in online shopping will continue to shop online and more new users who have come online powered by Jio will adopt online shopping.
For online and offline retail in India, Q3 is usually the best time of the year, as customers tend to spend the most around Diwali. Without fail, festive season sales are aggressively promoted by physical stores, national and international brands, local sellers, as well as their online counterparts such as Flipkart, Amazon, ShopClues, and Paytm Mall.
Since organised retail in India is yet to reach tier 3 cities and beyond, online commerce gives the customers in those regions an opportunity to buy off their wishlist during festive season sales, often at better prices since these online giants often provide discounts. This trend is sure to grow too. According to RedSeer,
In fact, residents from non-metro towns will account for 55 percent of all active online shoppers, with overall 185 million active shoppers in 2020.
The same firm had said a few days ago that online retailers saw 33 percent rise in monthly active shoppers in 2017 from 15 million in 2016, to 20 million last year. It added that shoppers in Tier 2 and smaller towns grew three-fold compared to metro shoppers, and accounted for nearly 41 percent of the overall online shoppers in 2017.