‘E-commerce growth in tier-2, 3 cities outpace tier-1 Indian cities’

The growth of e-commerce volumes in tier 2 and 3 cities in India is outpacing that in tier-1 cities, according to a recent report. “Smaller Indian cities are now accounting for a bigger volume of e-commerce sales. E-commerce growth in tier 2 and tier 3 cities in India is outpacing that of tier 1 cities,” said an ICICI Securities report. Volume share of these smaller cities in India’s e-commerce market increased to 46 per cent in Q4CY20 from 32 per cent YoY. Also, online spending per customer in tier 2 and tier 3 cities has also improved as these cities held a 43 per cent share of the e-commerce sales value last quarter, up from 26 per cent YoY.

“This has raised hopes of a sustainable last mile delivery economics emerging for the industry – yet hyperlocal last mile small parcel deliveries remain economically as challenging as ever,” it said.