According to several industry insiders, the pandemic-related tailwinds that drove significant growth in online shopping are now waning
New Delhi, NFAPost: The growth of shopping across e-commerce platforms is slower than anticipated, said a report by Economic Times (ET).
Data from Unicommerce, a provider of warehouse solutions for e-commerce, revealed a 16 per cent year-on-year (YoY) volume growth in the March quarter. Volumes increased by about 19 per cent in the third quarter.
Additionally, the relatively slow growth mirrors industry discussions in the past weeks on sales trends, the report said.
Consulting and market research firm 1Lattice said that e-commerce is expected to grow by 35 per cent in the financial year 2023, but the six months leading up to March have seen a “considerable” slowdown.
According to several industry insiders, the Covid-19 pandemic-related tailwinds that drove significant growth in online shopping are now waning.
“Over the past three years, e-commerce has seen significant growth and has been growing much faster than traditional retail channels. Although growth was slower in the last quarter compared to earlier quarters, we are still optimistic about the overall numbers,” said Kapil Makhija, chief executive of Unicommerce.
He added that e-commerce is still growing by double digits despite the resurgence of offline retail, indicating a significant shift in consumer purchasing habits.
Executives, on the other hand, claimed that because of factors like the slowdown in consumption and the reduction in discounts from new-age brands brought on by the funding winter, they are seeing lower uptake.
“Overall, the rate of growth is slower, and it varies between markets. Surprisingly, premium phones are still driving value growth in the smartphone market even though volumes have decreased,” a senior e-commerce executive told ET.
A decrease in volume has been observed in smartphones, one of the main product categories driving sales on online stores like Walmart-owned Flipkart and Amazon India. The third consecutive quarter of declining smartphone shipments, according to Counterpoint Research data, covered the months of January-March.
The data further revealed that India shipped over 31 million smartphones in the fourth quarter of FY23, a 19 per cent on-year decline. Along with being the third consecutive quarter of decline, this is the highest fourth-quarter decline for the Indian smartphone market, it added.
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