Online retailers in India could rack up cumulative sales of about $6.5 billion over the next four weeks, said analysts as e-shopping emerges as the chosen panacea for pandemic ills. According to a new study by Forrester Research, even as the overall retail pie in the country shrinks due to low footfalls in physical stores, e-commerce could grow by over a third compared to the previous year.
The e-retail surge will be powered primarily by the mega sales events hosted by Flipkart, which is owned by Amazon and Walmart. Together, the e-commerce giants are predicted to rake in revenue of around $4.8 billion during the week of October 15-21, the study said.
Ecommerce industry tracker RedSeer Consultancy had said in an earlier forecast that online sales could almost double to $7 billion during the month-long festive season this year.
“Do not read this 34 percent increase (in e-commerce sales) as retail spending returns,” said Satish Meena, Forrester Research’s senior forecast analyst, who estimates that the number of online shoppers this year will rise to about 60 million from the figure of 45 million e-shoppers last year.
A recent RedSeer Consultancy study also found that more customers are opting to shop online this festive season, as they are looking to stock up more on food, doubling their share to 6 percent. In categories such as home and furniture as well as appliances, which is projected to account for approximately 14 percent of gross sales up from 12 percent last year, other favorite purchases will be.
According to Forrester’s findings, the scramble for smartphones and consumer electronics, long the cornerstone of online shopping in India, has slowed this year. Compared to 36 percent last year, smartphones are expected to drive 34 percent of gross sales during this festive period, while consumer electronics will contribute about 17 percent, the report said. However, in the once-popular fashion market, which is projected to account for only 16 percent of total revenue compared to 24 percent last year, the greatest degrowth will be.
There is a spending cut, but because this is the festive season and the pandemic is more evident, some wages have been restored, they are coming together to push demand, “Meena said.”
“But it’s obvious that people are shopping online instead of going to (physical) stores,” he said.
RedSeer said in its survey that it saw 91 percent of respondents saying that they would buy online, compared to 87 percent last year. The largest rise comes from the metros, where 90 % of respondents said they would buy online this year, compared with 80% last year.
This strong shift in online shopping market preference is forcing brands to adapt their strategies.
Shital Mehta, CEO, Max Fashion India & Managing Director, Lifestyle International, told ET that with the launch of Myntra and Flipkart, the company has strategically extended its online presence. We are expanding our scope using e-commerce supply chains with these alliances and targeting a broader range of consumers without affordable trendy products, “he said.”
Max had only collaborated with Amazon in India previously. Brands have taken e-commerce seriously post covid-19 and have ambitious festive and beyond online revenue expectations, “said RedSeer Consulting’s Ujjwal Chaudhry, who predicts that the online brand channel will see a five-fold rise in the festive season compared to pre-COVID levels.” “It is estimated that private labels (owned by e-commerce companies) would account for 10 percent of gross revenue,” he said.
