Convenience, price stoking online sales growth long after pandemic is gone, suggest data

The pandemic has ended, the virus is lying low and mobility restrictions are gone but the crippling impact has given birth to a business that has not only survived the scourge but also appears to be poised for long-term growth – online sales. The restoration of normal business hours has not, in any way, impacted web commerce as citizens seem to have discovered the convenience of getting everything delivered to their doorstep and that too at a reduced price.

Sales of a whole range of items from biscuits to refrigerators is booming, showed the latest data by market researchers NielsenIQ and GfK India, The Economic Times has reported. “This reflects a post pandemic change in consumer behaviour, particularly in metro areas, where online shopping is gaining popularity due to its convenience, variety and competitive pricing,” Praful Babar, head of e-commerce for FMCG at NielsenIQ told the newspaper.
Data revealed sales contributions in various FMCG categories registered a sharp rise between January and December last year compared with the same period in 2022. For example, NielsenIQ data suggested that the contribution of e-commerce sites rose to 5% in 2023 from 3% in 2022 in impulse food categories such as chocolates, confectioneries and snacks. For other product categories such as washing powders/liquids, pre- post wash, detergent cakes/bars and blues, the contribution increased from 6% to 7% in January-December 2023 period. The rise for items like home cleaners such as for utensils, toilets, floors and glass the surge was 11% in 2023 against 10% in 2022. Electronic products recorded a rise in sales of 1-2 percentage points in 2023 over 2022. The rise in online sales in 2023 compared against that in 2022 would translate to a value of about Rs 3,000 crore for e-commerce.

Data revealed that in 2023 as much as 33% of TV sales, 20% of washing machines, 15% for refrigerators and 10% for air conditioners took place through the ecommerce route.

Researchers were of the opinion that this trend of rise in sales over the web would continue unabated this year too.

Parle Products vice president Mayank Shah told the newspaper, “Several smaller and premium brands are exclusively on ecommerce. In metros, it’s quick commerce which is driving adoption.”

GfK data suggested that in categories such as electronic and domestic appliances like TV sets, refrigerators and washing machines, online sales rose faster that through visit to the stores in 2023. Items such as frost-free refrigerators, front loading washing machines and TV sets that are 55-inch and bigger sized have recorded rise in online sales that are double compared to their respective categories.

“Traditionally, consumers prioritized pricing and mass-market options when shopping online. However, recent trends indicate a shift towards premium segments,” said Anant Jain. head of customer success India at GfK. Babbar was of the opinion that the trend was the same in FMCG products. Babbar revealed that online volume growth of impulse food and fabric care stood at 47% and 32% respectively in metro cities. These rates were as much as 400% of the rise in offline sales. Online volume growth in sales of soft drinks, biscuits, packaged atta and refined edible oils also displayed fast growth.

GfK researchers found that more and more consumers in Indian cities are turning to social media for their shopping needs. More than 70% of smartphone and computer owners now make online purchases while more than half of urban consumers find shopping on social media easy, thanks to targeted product recommendations from companies.