Online retail rose to record highs during the festive season, accounting for almost 53% of smartphone sales. The share was 37-38% for televisions, 15-20% for refrigerators and washing machines, 30-40% for apparel and over 5% for fast-moving consumer goods (FMCG), even as brick and mortar stores reopened fully, several industry executives said. A year ago, ecommerce contributed 2-35% of sales in these categories.
During the month-long festive period from mid-October – starting with Navratri and extending across Durga Puja, Dussehra, Karva Chauth, Dhanteras, Diwali and Bhai Duj – contribution of online sales went up by almost 10 percentage points over the September quarter, executives said.
Top corporates such as LG, Samsung, Hindustan Unilever, Apple, ITC, Reliance Retail, Aditya Birla Fashion, Arvind Fashions, Levi’s and Domino’s saw ecommerce sales increase significantly as consumers increasingly bought from home amid the pandemic, leading to a surge in first-time online shoppers.
Big consumer trend Most top brands revamped their digital storefronts, running promotions similar to those of online marketplaces, though the online sales surge was driven largely by Walmart-owned Flipkart, Amazon and Myntra, as brands’ portals still get limited traction.
Neighbourhood stores across categories have also established an online presence, executives said.
ITC chief executive for food business Hemant Malik said the shift to ecommerce is one of the biggest consumer trends since the pandemic took hold and is likely to be a permanent one.
The contribution of ecommerce to overall sales surged to 15% during the festive season, from 7-8% earlier, said Vijay Babu, vice-president, LG Electronics India, the country’s largest appliance maker. “Ecommerce marketplaces had record sales during the Navratri week, when our online sales grew by up to 200% in some categories,” he said. “Though the online growth rate came down subsequently, it was still bigger than last year.”
For Apple, the ecommerce contribution surged 10% percentage points to 40% during the festive season, partially boosted by its own e-store, which started operations in September. Samsung also had similar online sales growth, industry executives said.
Smartphone companies are going to post record increases in the online contribution, according to market tracker Counterpoint Research. While ecommerce reached 45% of total smartphone sales in the September quarter, it will touch record 52-53% during the festive period, said Counterpoint associate director Tarun Pathak “But we expect offline retail to gain traction next year, when the pandemic becomes controllable and due to increase in average purchase value as consumers prefer to touch and feel before buying costly handsets,” he said.
Gains for apparel companies Covid-19 and the subsequent adoption of online shopping habits have shortened ecommerce evolution by about half a decade, said Sanjeev Mohanty, managing director, South Asia, Middle East and North Africa, Levi Strauss & Co.
“From the high mid-teens, online contribution has almost doubled now,” he said. “Digital sales should be trending towards a third of our business in the next two years. In a normal scenario, it would have taken five to six years.”-ET Prime