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Changing customer behaviour helps establish new age e-commerce models

New e-commerce players have set a hawk-eye focus on the latest dynamic trends to ensure success for years to come

Changing customer behaviour helps establish new age e-commerce models
Peerzada Abrar Bengaluru
4 min read Last Updated : Aug 10 2022 | 7:11 PM IST
Recurring exponential growth has helped the e-commerce industry transform the Indian digital ecosystem. There seems to be a tectonic shift, point experts. They highlight that changes in consumer behaviour are leading to new e-commerce models, which are further disrupting the space.

These new players have a hawk-eye focus on the latest trends to ensure success for years to come, according to consulting firm Redseer. In the April-June quarter, as per RedSeer, the sector witnessed 40-60 per cent annual growth. In 2022, a compounded annual growth rate (CAGR) of 38 per cent will provide a fillip to gross merchandise value (GMV) growth, which is expected to reach Rs 4.9 trillion. Additionally, Tier-2 online shoppers are expected to drive growth as well.

The growth of e-commerce has led to impressive customer experiences giving rise to some of the most innovative shopping platforms.

“Interestingly, we saw that the growth trajectory has been robust for new e-commerce models which have gained share steadily in fashion and grocery categories,” Mrigank Gutgutia, partner at RedSeer, told Business Standard. 

Quick commerce became a hot favourite, with a 10x growth year-over-year. This sub-segment shall grow 15x in just three years to reach a market size of $5 billion. Players, such as Swiggy, Instamart, Zepto, Zomato, Dunzo and Blinkit, which are operating with a mission to make 10-20-minute-delivery the new normal, have witnessed huge demand.

With a presence in the top eight Indian cities and over 10 million users, Google- and Reliance-backed Dunzo provides instant grocery delivery services to consumers and connects merchants, partners, and users to facilitate transactions across courier and local commerce. In 2021, the company established ‘Dunzo Daily’, which uses a network of micro fulfilment warehouses, to help deliver goods quickly to customers within the daily grocery category.

Dunzo Daily is operational in Bengaluru, Pune, Chennai, Mumbai, Delhi-NCR, and Hyderabad. In 2022, the company raised $240 million in a round of funding led by Reliance Retail Ventures Limited—the firm’s valuation crossed $800 million.

Zepto, launched in 2021 by two 19-year-old Stanford dropouts, is present across 10 major cities in the country and has over 1,000 employees. It delivers around 3,000 products, including fresh fruits and vegetables, daily cooking essentials, dairy, and health-and-hygiene products, within 10 minutes. In May, the firm raised $200 million in a Series-D round, valuing the quick commerce company at around $900 million. It has also partnered with Zypp Electric for last-mile deliveries, which has helped extend its electric vehicle driver fleet by 1,500. The partnership has helped the company achieve over 20,000 deliveries per day in Delhi and will soon expand to Bengaluru and Mumbai within four months.

Another impressive sub-sector where new e-commerce models are emerging is social commerce, which involves buying products and services on social media platforms from people, primarily influencers. This sub-segment is witnessing a growth spurt; it effectively solves the problems of affordability and customer experience. Owing to a high referral share, this too has a low customer acquisition cost model, as per Redseer.

In this segment, DealShare is known to pioneer the community group buying (CGB) model in India. It allows a coalition of people, often living in one residential block, to obtain discounts by purchasing groceries in bulk. The practice is usually organised by a community leader, such as a local administrator or even a convenience store owner.

The company has a presence across 10 states and plans to expand to over 300 cities in 2022. It claims to have served more than 15 million consumers and caters to about 500,000 orders daily. The firm achieved a GRR (gross revenue run-rate) of $1 billion for the year ended March 2022—6.6 times growth over the previous fiscal.

In 2021-22, DealShare raised $210 million in a funding round led by Tiger Global and Alpha Wave Global, achieving unicorn status as its valuation crossed $1.7 billion.

The share of new e-commerce is expected to grow, especially in key categories, such as beauty, fashion, and grocery, as they continue to serve a key need for specific consumer cohorts effectively.

Topics :e-commerce markete-commerce growthOnline grocerye-commerce industryE-commerce firmsTrendsMarket trendsReliance RetailTiger Global

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