E-comm order volumes jump 26% in FY23, tier-1 cities lead


Tier-1 cities led the growth in e-commerce volumes in fiscal 2023 as work from office resumed after two years of pandemic-led restrictions, e-commerce enablement SaaS platform Unicommerce said in its annual trends report released Wednesday.

“As offices return to regular operations, there has been a notable shift of consumers shifting back to tier I and metropolitan cities for work, resulting in tier I cities exhibiting fast growth in order volumes relative to tier II and tier III cities. Tier I regions indicated the highest year-on-year order volume growth of 31.1% during FY2023, followed by tier II and tier III cities which witnessed year-on-year order volume growth rates of 23.3% and 22.4% respectively, during the same period,” Unicommerce said in its report.

However, smaller cities are exhibiting “continued e-commerce adoption” as consumers spend more time online and as local businesses in these markets tap e-commerce to grow sales, it said.

In FY23, share of tier II and tier III cities as a percentage of the overall e-commerce market stood at 18.6% and 37.1%, respectively, down marginally from 19.2% and 38.6%, respectively, in the previous fiscal. Tier I cities, on the other hand, reported an increase in market share during the same period.

Overall, the e-commerce industry recorded a 26.2% jump in order volumes in FY23 supported by a 23.5% rise in annual GMV (gross merchandise volume) compared to the previous financial year. As expected, electronic peripherals and home appliances led the growth during the year, followed by demand for eyewear and beauty and personal care products. Demand for beauty and personal care brands was led by aggressive discounting across marketplaces.

Electronic products and peripherals segment reported a 46.8% jump in year-on-year order volume growth and GMV grew by 20.6% in FY23, the report stated. “This can be attributed to the inclusion of newer brands which were seen offering economical products across the segment,” it said. Meanwhile, the beauty and personal care segment grew 26.6% year-on-year in terms of volumes and 18.9% in GMV.

Omnichannel adoption rose rapidly during the year, said Unicommerce that works with brands such as Mamearth, boAt Lifestyle, Lenskart, Timex, Myntra, TCNS, among others. As a result, the number of online orders shipped-from-stores grew 44.6% year-on-year.

“The consistent growth of over 25% underscores the robust maturity of the sector. E-commerce is no longer just an additional sales channel; it has seamlessly woven itself into the fabric of modern business. Companies are harnessing digital platforms not only to sell but also to promote and engage with consumers,” Kapil Makhija, CEO of Unicommerce, said.

Meanwhile, orders on marketplaces grew at a faster clip, reporting a 31.2% growth during the year compared to pure-play verticals. “As brands continued to adopt a mixed approach to serve their customers across their brand websites as well as marketplaces, FY-2023 saw consumer preference move slightly towards marketplaces which witnessed a 31.2% year-on-year order volume growth during the period,” according to the report.

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Updated: 10 Aug 2023, 12:03 AM IST

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