Indian e-tail industry grew 20% in H1 2017: Redseer

The growth of the Indian e-tailing industry in H1-2017 was around 15-20 per cent but it picked up well in H2-2017, primarily due to multiple sale events, says a Redseer report. It witnessed the largest ever monthly GMV in the festive month (September) of 2017. The report says that the industry is likely to touch the $28 billion mark in 2018.

Though there was a slump in 2016 with the growth being just 12 per cent, the industry recovered well in 2017. A key reason for the e-retail industry’s recovery is the shift in the focus of the e-tailers to tier II+ cities. A good amount of new users were added from the tier II+ cities in 2017 which was a very positive sign for the industry, as per the report called E-Tailing In India: Redseer Perspective.

The e-tailing industry witnessed good growth across the key categories, with the fashion category witnessing a growth of 18 per cent. Growth potential is huge in 2018 with fashion as one of the preferred categories for new shoppers, says the report.

The Indian e-tailing industry is highly sale driven. About 30 per cent of the annual GMV comes in just 10 days of the sale period. With the higher number of people shopping during the sale period, there is always a good number of new consumer addition during a sale.

The 10 days of sale period witnesses an increase in the average order value (AOV) of the consumers as more people buy high-value items. There is also increase in the number of daily transactions as there are more number of consumers on the platforms looking for the best deals.

The Redseer report also notes that the industry witnessed a sharp increase in the number of yearly shoppers from 75 million in 2016 to 90 million in 2017. Metros witnessed a slower growth in the number of new shoppers adding just 3 million whereas, tier II+ cities added nearly 10 million shoppers in 2017.

The number of online shoppers is expected to grow by 15 per cent, 30 per cent and 50 per cent in metros, tier I and tier II+ cities, respectively in 2018. The industry will thus add another 30 million shoppers in 2018, majority of which will come from the tier II+ cities.
There are two key drivers of this growth. One, more and more people will come online powered by the telecom providers like Jio. Two, the people who are currently online will start using the e-tailing services, adds the report.