E-tailers Buck The Slowdown Blues

Festival season sales, rise in non-metro shoppers drive growth

- Sangeetha Chengappa

Bucking the economic slowdown led by tepid consumer sentiment across consumer goods, retail, and other industry sectors, the Indian consumer Internet industry grew 38 per cent, exiting 2019 at $76 billion and is set to exceed $100 billion in 2020.

Consumers, who chose to cut down on overall and discretionary spend, loosened their pursestrings only during big sale days that dotted the year, from the Republic Day sale in January right up to the annual blockbuster Diwali sale, which saw e-tailers rake in a record $3 billion in the first 6 days of the festive sale month with high-ticket categories such as mobiles, electronics, large appliances and home decor registering a 3-4X jump in sales.

Good year

“Despite a tough macro-economic environment e-tailing fared well in 2019 for two major reasons. First, during challenging times, consumers look for better value which e-tailers created with multiple affordability initiatives including cashbacks, private labels, no-cost EMIs, etc. Second, as a result of non-metro customers migrating to online shopping driven by the strong value proposition provided by etailers this year, the online shopper base from Tier-2 plus cities grew to 50 per cent compared to 40 per cent in 2017,” said Ujjwal Chaudhry, Associate Partner, RedSeer Consulting.

Convenience matters