Trends shaping India’s ecommerce landscape

COVID-19 has accelerated the shift to online shopping, and this shift persists across categories as consumers continue to keep their out-of-home engagement low to curb the spread of the virus.

Even though restrictions by authorities have been eased in most parts of the country and physical stores are now open, the growth trajectory of the ecommerce industry looks unlikely to shift down. We are entering a world that will be the amalgamation of online and offline shopping. The rising number of first-time online shoppers across India and ecommerce users from Tier II and Tier III cities of India are driving the ecommerce growth.

As ecommerce becomes an integral part of retail, these trends have been the driving force for the last couple of years and will continue to shape the future of ecommerce industry.

Digital-first brands leading the way 

As consumers across demographics make their purchases online, more consumer brands are setting up their digital stores to directly engage with customers. The digital-first D2C wave has swept the ecommerce industry.

The success of digital-first companies like Mamaearth, Nykaa, and SUGAR Cosmetics has been phenomenal and took the industry by storm. This has also influenced traditional FMCG giants and personal care brands to invest heavily towards developing their own website in an attempt to build customer loyalty.

In fact, some of the leading FMCG companies have also acquired or invested in few digital-first brands.

According to Unicommerce reports, brand websites are performing way better than the marketplace with 80-90 percent order volume growth in the last year. While D2C and digital-first brands are growing at a lightning speed, the marketplaces will always be the volume drivers, and hence D2C brands continue to focus on both website and marketplaces as important channels to interact with consumers.

As the number of digital-first and D2C brands continue to rise in India, the ecommerce industry is witnessing the emerging Thrasio style model in India. A lot of new companies have emerged in the last year with a similar model and they are looking to acquire these Digital-first and D2C brands of India.

These companies have raised funding from some of the marquee investors. This will also further promote the culture of D2C, leading to the launch of many more digital-first brands.