India’s consumer internet economy showed strong resilience in 2020. The overall gross market transaction value dropped earlier last year due to the pandemic but recovered by the end of the
year.
Industry experts like Vivek Sunder – COO of Swiggy, Umang Bedi-Co-founder of DailyHunt, Mukesh Bansal-Co-founder of CureFit and Visheh Shrivastava, MD of Temasek all were of the opinion that COVID-19 has accelerated digital adoption and changed consumer behaviour.
These experts said that consumption in Tier II & III cities picked up more due to a number of reasons like reverse migration, adoption of digital mode among others.
Retail: According to RedSeer Consulting, retail has suffered post COVID but is almost back to pre-COVID levels. RedSeer’s research shows that the market size dropped from $906 billion in 2019 to about $780 billion in 2020.
Mrigank Gutgutia, director at RedSeer, said, “2020 has been a year of remarkable 40% growth in e-tailing, which resulted in multifold increase in online penetration across categories. Fashion and electronics brands have been strong beneficiaries of the digital, where within fashion subcategories like footwear and accessories have seen maximum digitization. Most importantly, consumers have been shopping for product or service quality of online retailers rather than price and are keen to continue shopping online in 2021 as well- which bodes very well for the continued growth of the online sector and makes it imperative for brands to focus on online offerings.”
E-Grocery: The E-grocery market size is estimated to grow 8-times in the next 5 years. The market has grown 60% from CY 20 and is expected to grow 41-49% by CY25F.
Another recent report by Bengaluru-based RedSeer and Bigbasket (Brand Intelligence) found that demand for comfort foods like noodles and cookies, immunity boosters such as lemon, and hygiene products like sanitisers picked up after the pandemic while essentials remained strong.
Within snacks and branded foods, biscuits and cookies were the largest sub-category and grew the most.
“We have observed that traditional brands which pivoted quickly to be digitally ready brands have seen 2x+ jump in sales compared to offline brands,” said Anil Kumar, Founder & CEO of RedSeer.
Now, JioMart is set to take the pole position in online delivery of groceries.
Homegrown Brands: Online first brands gained 30% share of e-commerce which will grow to 45% by 2025. Direct-to-consumer (D2C) and DNB brands are now driving much of the e-commerce growth in India, according to RedSeer’s research.
Commenting on the consumer economy, Anil Kumar, said, “2020 has truly been a landmark year for India’s consumer internet economy. Overall India Internet GMV grew to $ 65 billion in 2020, and is now creating a large impact on the overall economy, with almost 4.6% of total private consumption coming from India Internet. We expect India Internet to accelerate further in 2021, driven by massive growth in consumer adoption and satisfaction in 2020 across sectors, with India Internet expected to cross triple digits GMV for the first time in 2021 and eventually
become $250 billion scale and 10% of private consumption in 2025.
