The year 2021 has brought with it an array of new opportunities and technological advancements that have changed the way people shop. From being heavily reliant on offline retail and local mom and pop stores to feeling comfortable with e-commerce becoming an inseparable part of our lives, 2021 is a game-changer.
When we talk about the growth of e-commerce, it is impossible not to mention the “Covid pandemic”. While it was a disaster for many flourishing industries, e-commerce was certainly on the other end. If you own a point of sale and have survived the past couple of years, you may have shifted part of your business to selling online, or at least found new ways to get your product to hit the market. your client’s door.
To clearly understand the dominance of e-commerce, let’s talk about numbers. About 2 years ago, only 13.6% of sales were made online. Today, that number is closer to 19.5%, a 45.8% increase in e-commerce market share over two years. Incredible, isn’t it?
Growth of different categories of e-commerce
(1) The unprecedented rise of ePharmacies –
During the year, the online pharmacy industry experienced healthy growth. India’s ePharmacy business is currently growing rapidly, according to an EY report, and is expected to reach $ 18.1 billion by 2023.
(2) Continued demand for online groceries
Before the pandemic, only 7% of grocery purchases were made online. Today, more than 20% of customers buy online, according to MasterCard. 70-80% of grocery shopping spikes are also expected to become permanent in the future.
(3) Rise in social commerce and new formats
Product discovery and purchase through social media has continued to increase with the advent of players like Meesho who already have over 2.5 million orders per day. This growth has been primarily driven by Tier 2 and Tier 3 cities and is expected to continue with increasing attention from e-commerce giants.
(4) Expansion of the vernacular offer
In addition, the growth of level 2.3 cities is also driven by vernacular e-commerce. Amazon and Flipkart continued to expand the directory of supported regional languages to cater to a larger customer base.
(5) Increase in hyper local and ultra-fast deliveries
E-commerce players in 2021 have been working on reengineering their supply chains so that they can deliver their items to customers as quickly as possible. The 10-minute delivery offered by some e-commerce platforms is the best example of this.
(6) The biggest festive sales ever
2021 saw the biggest festive sales of all time, despite a reduction in big discounts. Positive sentiment during this season, further bolstered by latent demand from the previous year, saw GMV rise 23% to $ 9.2 billion.
What were the challenges of e-commerce in 2021?
In 2021, the uncertainty and lockdowns caused by the lockdown continued throughout the summer, and the second wave caused a shift in consumer sentiment just as things started to improve. Another aspect that has caused ambiguity in the industry is the tightening of regulations on e-commerce, causing changes in models and strategies.
More and more brands have continued to shift their marketing operations and spending online. We have seen a lot of activity not only from our corporate and start-up clients, but also from more traditional brands and manufacturers. Increased competition online has also resulted in increased customer acquisition costs for some. However, many brands have experienced unprecedented growth, especially in niche categories.
One thing is for sure: e-commerce in India is experiencing a very exciting time of continuous growth and constant innovation. Since our e-commerce penetration is still in single digits, there is significant leeway for expansion. Now, more than ever, it’s time to assess, strategically plan, and build to scale your digital business for growth, in 2022 and beyond.
The opinions expressed above are those of the author.
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