First Signs of e-Comm Slowdown !?

Money control reported first signs of e-commerce storm settling down a bit. For the first time the growth in the festive season e commerce was at 25%. The number ofcourse tells us the dizzying levels of growth earlier as well as high expectations. The festive season growth at Rs 76,000 crores was 9% lower than the projected 83,000 crores. This is expected to be 15-16% of whole year sales against the 19-20% of yearly sales trend over last half decade. In India, the gross merchandise value of festival season sales has been growing twice as fast as online retail overall.

So is this the first sign of ecommerce markets pleatuing in India. Let's take a dive into the article a bit.

• The first reason is slower smartphone sales growth as replacement market remains strong but new phone users have started declining. Mobiles remains the largest selling product online.
• On the other hand fashion grew by 32%, Electronics by 13%. The highlight of the seasons was a 86% growth in grocery, e-pharmacy, beauty and personal care, and home care segment.
• Another significant statistic is a 26% growth in online shoppers touching a figure of 125 million nationally. More significant is the fact that 56% of this growth came from tier-B and smaller cities. This is important because it manifests the widening and deeping roots of ecommerce pan India,
• Expectedly as the ecommerce reach increases in tier-B and smaller towns of India - the sales focus is less on branded items and more on unbranded ones. That may suggest/explain lower sales growth in rupee terms without any reduction in online buying enthusiasm.

So in short the interpretation is open to perceptions. This might mean the festival season’s importance for online retail is reducing and online shopping may be growing into a cultural habit of sorts. Or is it really the firts signs of trend tiring. Only time will tell.

For now we need to keep a close eye on the trend as it has consequences for retail marketeers as well as digital commerce technology backbone developers. Do tune in every week to de-code square tech as we make sense of the tech chaos around.

Ps. As ecommerce grows in tier B cities and beyond Flipkart gets bigger and beats Amazon at online sales. And that's not all meesho seems to breathing hard and close giving Amazon a run for even the second place. More on this when concrete figures available.