Consumer behaviour shift: Small town buyers more inclined towards e-commerce in post-Covid world

Even as Covid-induced shift in consumer behavior towards e-commerce or online buying, led by Flipkart and Amazon, is increasinly becoming apparent, the change is more striking among consumers living in Tier-II and III cities than Tier-I. The inclination towards online buying for consumers in Tier-II and III cities is almost 2x more currently vis-à-vis pre-Covid. According to a KPMG survey of 2,376 respondents based in Tier-I, II and III cities, while the willingness to adopt online channel among Tier-I consumers increased 19 per cent from 44 per cent pre-Covid to 63 per cent now, Tier-II and III consumers showed 27 per cent intent to online buying. From 29 per cent before Covid, 56 per cent Tier-II consumers were looking to buy goods online while the share for Tier-III consumers increased from 36 per cent to 63 per cent.

Post Covid, consumers have been making a beeline for e-commerce route for their consumption needs as the pandemic fear continued to loom large. Hygiene and safety concerns in physical stores or traditional channels of buying have sparked growth for e-commerce sector in India as use cases multiplied with consumers fulfilling their needs not just for apparel or electronics but also for food, grocery, medicines, personal care and more. “Consumer goods companies and retailers will need to identify ways to continue to build consumer trust and confidence going forward. As a consequence, companies will need to develop their online presence and last-mile logistics & delivery capabilities and manage supply chain hygiene across all levels,” said Harsha Razdan, Partner and Head – Consumer Markets and Internet Business, KPMG in India.