E-commerce value growth remains flat in Q4 2020 amid surge in small-town buyers, low-value goods

The growth in the value of goods sold via e-commerce channel in Q4 2020 has remained flat in comparison to the year-ago period amid the rise in value-conscious customers from Tier-II cities and beyond buying low-value or affordable goods. While the e-commerce volume grew 36 per cent in Q4 2020 vis-à-vis 26 per cent in Q4 2019, the value segment posted 30 per cent growth during Q4 of the last and preceding year as well. This disparity in the last two years “is a consequence of new consumers from Tier-II and Tier III+ cities and uptick in low value products and categories,” said a report by Unicommerce and Kearney on Wednesday. The growth in hinterland’s customer base focusing on affordable buying has also led to reduced average order size by 5 per cent during the quarter from Q4 2019.

“India’s e-commerce sector is seeing a paradigm shift with the growth of Tier-II and Tier-III cities and the emergence of new categories. Consumers are getting value-conscious, therefore companies will have to continue to invest more in creating products offering value for money to consumers. Companies will also have to diversify and expand into new categories,” Kapil Makhija, CEO, Unicommerce told Financial Express Online.