Shoppers from tier-I and tier-II cities drive India's e-commerce growth

Growth was powered by the direct-to-consumer (D2C) segment

e commerce
Representative image.
Peerzada Abrar
2 min read Last Updated : Aug 07 2022 | 8:24 PM IST
India’s Retail and E-commerce Trends, a report prepared by e-commerce tech firm Unicommerce along with Wazir Advisors, assesses the growth of India’s retail ande-commerce industry in FY22 and how consumer buying patterns have changed in the last two years. The report underlines that over this period India’s e-commerce growth was driven by consumers from tier-II and tier-III cities. Furthermore, growth was powered by the direct-to-consumer (D2C) segment.

Key highlights

  • $836bn Estimated size of India’s retail sector in 2021-22 (FY22)
  • 81.5% Contribution from traditional retail
  • 12% Organised brick-and-mortar, and 6.5% online sales channels 
  • $225bn Potential size of the online retail market in India, which is expected to grow at 32% a year over the next few years
  • $70bn Potential size of the D2C segment in the next few years, reflecting a robust CAGR of nearly 45%
  • 69.4% Overall e-commerce order-volume growth YoY in FY22, compared with 49.4% in FY21
Vibrant sectors

  • 143% Order-volume growth of beauty & personal care, the highest among all sectors in the fiscal year gone by (FY22)
  • 62.4% Order-volume growth in health & pharmaceuticals over the last two years
  • 61.7% Order-volume growth in FMCG & agriculture over the last two years
  • 59.7% Order-volume growth in fashion & accessories, and 34.7% in electronics & home appliances, which were the biggest categories
  • D2C and digital-first brands continue to rise, with consistent order growth of brand websites
  • 80.4% Faster growth of D2C brands on websites; marketplace growth was 59.6%

Return orders decline

  • 14.8% Share of returns in overall order volume in FY22, compared with 16.10% in the previous year
  • 18.8% Returns on cash-on-delivery orders in FY22, down from 22.1% in FY21
  • 10.4% Share of returns of prepaid orders remained constant YoY

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Topics :e commerceRetail sector

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