Economic Slowdown: E-commerce platforms aim to focus on tier 2 and 3 cities to double sales

New Delhi: As the festive season kicks in amid economic slowdown, e-commerce marketplaces have geared up with a focus on tier 2 and 3 cities to double their sales compared to last year.

"The e-commerce market is booming in India, especially as more people continue to join the digital bandwagon from tier 2 and tier 3 cities," said Saahil Goel, Co-Founder and CEO of Shiprocket -- a logistics platform for small and medium businesses (SMBs).

"It is unlocking a new digital market wherein buyers and sellers can easily transact with each other with touch-of-a-button experience." Already, Shiprocket has witnessed 75 per cent increase in its monthly order volume during the last festive season. "This year, our Festive Season Trends study reveals that there will be a 2x growth during the upcoming festive season. This is a very positive development and we look forward to it," said Goel.

The report says online direct-to-consumers (D2C) SMBs are expecting a promising 100 per cent growth as compared to last year's festive sales. This is because customers are now getting more comfortable buying products online outside of marketplaces.

Marketplace sellers will grow by 30 to 50 per cent on an average with the expectations of over 100 per cent growth in categories like beauty, health and apparel, according to the report conducted with a sample size of 1,900 sellers across the country.

While health and beauty products have emerged as fast-moving products in tier 1 cities so far, home and kitchen products have picked up considerable traction in tier 2 and 3 cities.

During the study, sellers highlighted that timely delivery of shipments and visibility of their products on large marketplaces are their two biggest concerns this festive season. Besides, after the general market trend and stringent regulatory policies, consumer discounting during this festive season will be relatively lower.

This will to a great extent affect the moving volumes via e-commerce platforms and force people to look for other market alternatives.

Shiprocket optimises existing logistics infrastructure using data and artificial intelligence to offer seamless shipping solutions for every online seller. The platform has partnered with over 15 logistics providers enabling sellers to ship products across 26,000 pin codes in India and to over 220 countries globally.

Meanwhile, Flipkart has added over 50,000 direct jobs across its supply chain, logistics arm and customer support. In addition, it expects to have increased the indirect jobs through the seller network by 30 per cent as compared to last year, taking it to 6.5 lakh.

India's largest e-commerce marketplace has also onboarded nearly 27,000 kiranas across 700 cities to its pan-India supply chain, helping it reach out to millions of new consumers during the upcoming festivities.

According to global consulting major PwC, the Indian e-commerce market will exceed 100 billion dollars by 2022 from 35 billion dollars in 2017 due to healthy growth in the organised retail sector, a fast-growing economy and robust demographics.