Several large Indian companies have reported their financial data that reveals that despite a near recovery of offline sales to pre-pandemic levels, the growth of eCommerce sales continues to dominate. Let’s find out more –
The pivot from offline to online and the impact
Since 2020, eCommerce has seen unprecedented growth globally. India wasn’t left far behind. In fact, showing one of the highest growth rates, the Indian eCommerce market has seen an incredible expansion. Here are some numbers to prove it:
- India’s e-commerce industry will grow at a rate of 19.4% to reach $111 billion in 2025
- In the 5 years from 2020 to 2025, India’s eCommerce industry will have shown a growth of 84%
- The Indian eCommerce industry is now globally 9th in cross border growth
- eCommerce sales form 8% of total retail sales in India, a number that had peaked at 9.6% during the pandemic, and was a mere 3.7% before.
The growth can largely be attributed to the lockdown and the inability to physically go to the shops.
Even though the pandemic might have fuelled this growth, there are multiple other factors that have proven the benefits of eCommerce time and time again.
“In the post-Covid world, eCommerce has emerged as the most preferred contactless method of making purchases among consumers,” Mohit Malhotra, CEO of Dabur India
Brands all over the world had to shift to online channels of commerce just to stay afloat. Even legacy and veteran brands knew that starting to sell online was the only way their business could sustain through the global crisis.
That might have been their best decision ever.
The rise in eCommerce sales for mega-brands
Mega brands in India like Reliance Retail, Hindustan Unilever, Tata and Dabur have also come to the same conclusion.
Their financial reports for FY22 have shown that despite the pandemic receding, eCommerce sales are not showing any signs of slowing down.
- Reliance Retail showed a 17% contribution from eCommerce sales compared to 10% last year
- Dabur saw its online sales rising by 1.5% to 6.5% in FY22
- Tata Consumer products saw their online sales go up from 2.5% in FY20 to 5.2% in FY21
- Hindustan Lever has seen more than a 20% share of eCommerce sales just in the March quarter
Most countries have completely lifted lockdown and restrictions signalling the advent of normal life and trade.
Even though analysts had predicted that eCommerce would suffer once people are presented with the option of shopping physically again – that does not seem to be the case.
Online platforms are being seen as a bonus to the presence of offline shops. People WANT the convenience of being able to choose between offline and online channels. The presence of both channels has increased the average shopping rate by as much as 35%.
Additionally, the promise of the availability of wider varieties online has only cemented the need for eCommerce businesses.
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What does this mean for you?
In a nutshell – eCommerce is here for the long haul.
“Customers have been using omnichannel capabilities for they have been getting the benefit of the convergence of technology and physical stores,” – Gaurav Jain, Head of Strategy at Reliance Retail.
If you have physical stores, it’s time to complement those efforts with an omnichannel presence. Having an online business opens up an host of opportunities. From a global customer base to diversification of revenues, your business needs an online presence.
Not just eCommrce, but Direct-to-consumer (DTC) eCommerce in specific has seen a massive spike. Brands want to cut out the aggregator and be more in control of their own revenue. This is what Sanjiv Mehta, Managing Director at HUL had to say –
“Our DTC website already has 25 million annual visits, and together with the ecommerce platform, our online sales today contribute 30% of our Lakme business”.
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