India’s ecommerce industry experienced remarkable growth in FY23, reaching a remarkable GMV of $60 billion, in spite of the slowing yearly growth rate compared to the pandemic years. A report by Redseer Strategy Consultants highlights that the online retail sector grew by 22% last fiscal, in contrast to a 36% growth in FY22. Interestingly, this growth is still 2.5 times higher than the pre-COVID-19 levels, outperforming the general retail consumption trends.
The report further notes a significant maturation in the Indian user base with 31% of annual shoppers transforming into monthly shoppers, a leap from 23% in FY21. This evolution, particularly in select urban and Tier II and III markets, has significantly contributed to the growth of ecommerce.
Ecommerce is now deeper in terms of the diversity of purchased categories, resulting in 1.2 times better take rates compared to FY19. Such deepening has aided in robust revenue monetisation. Importantly, ad monetisation has been a critical driving force behind ecommerce revenue in FY23, capturing customer attention, enabling better targeting, and leading to higher conversion rates. With 210 million annual shoppers in FY23, ad monetisation accounted for $1.2 billion in revenue, growing at a 37% rate YoY, as per Redseer estimates.
Nevertheless, there’s still room for growth as indicated by global platforms like Walmart and Alibaba.com. These platforms derive 3% of their GMV from ad businesses, which suggest India has an untapped potential for growth.
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The Flipkart Group, encompassing Flipkart, Myntra, and Shopsy, managed to sustain its ecommerce industry market share at 48%. This group has expanded 1.6 times faster than the industry average in the first quarter of 2023, amid escalating competition.
The rise of D2C brands has immensely benefited online retail, pushing traditional players to embrace the digital route, leading to a competitive shopping experience that motivates consumers to shop online. Over the past three years, an influx of new users, especially from non-metro areas, are increasingly willing to explore ecommerce. In FY23, fashion emerged as the dominant segment in ecommerce, holding a 27% market share, largely thanks to the growing number of female shoppers.
Moreover, strategic partnerships and collaborations with global and Indian fashion brands have enabled online retailers to gain wider recognition and broaden their product offerings. While the rate of growth has slowed post-pandemic, the ecommerce industry continues to thrive.
Source: yourstory.
