- India’s monthly user or ‘ordinary shopper’ base now stands at 65 million.
- Fashion is now the biggest category as it has overtaken mobile phones; beauty and personal care is one of the fastest growing categories.
- E-tailing advertising revenue also grew strongly, generating more than $1.2 billion in FY23.
India’s e-tailing or electronic retail business grew 22% in FY23 to $60 billion in Gross Trade Value (GMV). The pace of growth is slower compared to the pandemic years – which saw 36% growth in both FY22 and FY21, says a report from
“Despite the loss of momentum, e-tailing today is 2.5 times higher than before Covid and is far outperforming total retail consumption, which has been lukewarm in recent quarters due to inflation concerns,” said Mrigank Gutgutia, partner at Redseer.
This robust growth is driven by highly relevant and affordable offerings on e-tailing platforms and standardized experience. Growth in direct-to-consumer brands and accelerated digital adoption of traditional brands contributed to growth, according to Redseer’s India E-tailing Update.
Growth in regular e-shoppers
At the same time, shoppers are showing signs of maturity, as evidenced by online shopping becoming a habit. There are a whopping 65 million monthly users or regular shoppers – this is the highest number ever.
A whopping 31% of annual shoppers are now also monthly shoppers. This number is up from 23% in FY21 – indicating that more people are shopping online across different categories more often.
“In the past three years, new users have joined who want to try it
It’s fashion over phones
The depth of the e-tailing market has grown compared to pre-Covid levels, across all categories. Mobile phones were the most dominant category before the pandemic, in FY19, but now fashion has become the largest category, accounting for 27% of sales. Mobile sales are a close second at 25%.
“Strategic partnerships of e-commerce platforms with global and Indian brands, along with a change in shopper mix and an increasing share of female shoppers have resulted in an explosion of fashion sales,” added Gutgutia.
While beauty and personal care represent only 4% of total GMV, it is growing exponentially at 52%. The grocery segment and home categories have seen 64% and 39% compound annual growth (CAGR), respectively, between FY19-23.
Platforms are gaining traction
The sellers also won. With 1.2x better adoption rates, product sales across India through e-tailing have grown 3x – from $2 billion in FY19 to $6 billion in FY23. As the number of frequent e-shoppers grows, the platforms can also diversify their revenues.
E-tailing ad revenue also saw strong growth, with ad revenue generation exceeding $1.2 billion in FY23.
The report also said that Flipkart group, one of India’s pioneering e-commerce sites, has been the most resilient in terms of market share in recent years, reaching 48% market share in FY23.
Redseer says Flipkart withstood competition from incumbents thanks to a large selection, varied affordability schemes and an understanding of the needs of India’s huge e-tailing shopper base, including those of T2+ cities.