- E-Commerce sales in 2019 saw a hike due to attractive offers and contributed to sales of smartphones, television, air conditioners, and washing machines
In 2019, e-commerce’s contribution to the sales of smartphones, television, air conditioners, and washing machines rose from the previous year, which advertisers attributed to the continued change in consumer habits and proliferation of price-competitive online releases. The latest market tracker data from GfK India shows that e-commerce’s contribution to overall smartphone sales has risen from 26 percent in 2018 to 35 percent in 2019. The share is up to 19 percent from 14 percent in 2018 for total mobile phone revenues, which include feature phones.
Online e-commerce sales now account for one-fourth of the total market for televisions, up from 21 percent in 2018 although the overall market declined 2 percent last year.
In 2019 e-commerce participation in white goods has risen by 1-2 percentage points. The contribution, however, has nearly doubled in the last two years–6% for refrigerators in 2019, up from 3% in 2017; 13% for washing machines from 7%; and 9% for ACs from 4% in 2017.
Haier India’s president, Eric Braganza, said e-commerce will continue to be a bigger platform for smartphones and TVs, but it can grow up to 12-15 percent for appliances, and then stabilize because of the touch-and-feel factor in buying decisions.
MD Nikhil Mathur from GfK India said the upsurge in the online sales channel could be due to rising internet plus smartphone penetration and growing digital behavior. According to his report, 58 percent of urban customers surveyed agreed that they wanted to have the shops and services available all the time.
“Convenience, availability 24×7, product choices, simple financing solutions and enticing deals ahead of new releases have oiled the e-commerce growth engine. The offline channel continues to play a significant role in the shopping experience’s human touch, personalization, and satisfaction. The emergence of the Omnichannel will also continue to play a significant role for marketers, “Mathur said.
GfK is India’s only market research company that tracks actual sales to customers unlike others, monitoring shipments that can also include unsold stocks. Recently it published figures showing household appliance sales growth was highest in three years.
The researcher said that new entrants are targeting online channels first to establish a foothold in India and then graduate from offline stores.
Exclusive online electronics brand BPL India COO, Manmohan Ganesh, said that, except for a few retailers, no one can match the large selection of products available online that triggers growth. “Touch-and-feel is still important for appliances, though those factors have disappeared for smartphones or televisions,” he said.
Nonetheless, growth in online sales declined in 2019 compared to 2018 due to the base effect, customers have yet to fully open their purses and the government has tightened e-commerce standards, industry leaders said.
Combined sales for television and home appliances fell from 107 percent in 2018 to 30 percent last year’s online sales growth rate. Nevertheless, growth in smartphone online sales remained isolated, recording 45 percent growth over the past two years each.
Yet increases in e-commerce revenues have managed to outpace brick-and-mortar stores across categories in 2019. GfK said demand for products such as ultra-HD TVs and smart TVs increased by 10 percent for 32-inch-plus screen sizes in offline stores versus 33% in online last year.