While the country was locked down twice over, nimble fingers were busy tapping on purchases without venturing outside their homes
It was the summer of 2020 and 28-year-old Aban Patel was in a fix. She was expected to attend a family wedding later that year and needed to organise her wardrobe. “I am Parsi and super organised; besides I had strict working hours to adhere to while working from home. How was I supposed to go shopping for wedding attire in a lockdown?” Patel, who works in the HR department of a global management consultancy, had always scoffed at shopping on a website but post the COVID-19 lockdowns she’s a complete convert. Slow scrolling on Instagram, following fashion influencers, frequent visits to the clutch of fashion sites, and Patel shortlisted and bought the three outfits she needed, all within her budget. “It was amazing how easy the experience was,” she laughs while recounting her adventures in online shopping.
The pandemic effect
The year 2020 changed our world as we knew it. For the first time, the human population had to actually alter daily habits and learn about new technology and services that helped to deal with working from home. The sixth edition of The Global Payments Report (GPR) states, “[Global] e-commerce growth accelerated in 2020 despite recessionary headwinds, posting U.S.$4.6 trillion in transactions, a 19 per cent increase from 2019. This growth accelerated the rate of e-commerce penetration by almost three years, with total transactions jumping from eight per cent in 2019 to 10 per cent in 2020.”
According to a report by Bain & Company for Flipkart, titled How India Shops Online 2021, “India has the third-largest online shopper base globally, with 140 million e-retail shoppers in 2020, only behind China and the US.” The report also highlights the contrasts in India’s retail market for the financial year 2021: “The overall retail market shrunk by five per cent, along with a 7.3 per cent contraction in GDP due to sustained lockdowns across India. However, the e-retail market surged by 5 per cent to reach $38 billion despite a multi-month lockdown. This was driven by COVID-19, which caused increased adoption of online channels.” This increase was even greater in metro cities, as the report states that one in three people shopped online at least once across the top eight metros in 2021. Bengaluru led the way, with one in two people shopping online at least once last year.
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While Patel might have been a reluctant Internet shopper, millions of Indians have taken to shopping on the web for their beauty, fashion and personal intimacy needs, not to mention groceries. E-commerce in India is projected to reach US$99 billion by 2024, growing at a 27 per cent CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth, says a report by the India Brand Equity Foundation (IBEF).
“WHILE E-COMMERCE WAS BOOMING PRE-2020, IT DID NOT INVOLVE LUXURY FASHION AS A STRONG CONVERSATION. THIS HAS NOW CHANGED AS THE TRIBE OF DIGITAL CITIZENS CONTINUES TO GROW EXPONENTIALLY.”
Tina Tahiliani Parikh
Many traditional brick-and-mortar enterprises have had to embrace the realities of the pandemic world, taking to social media and changing strategy completely to shape-shift with the times. Tina Tahiliani Parikh, Executive Director of Ensemble–an early entrant in the multi-brand Indian luxury designer retail space–says, “COVID-19 changed everything for the luxury retail players as it triggered a digital revolution of sorts across the world. While e-commerce was booming pre-2020, it did not involve luxury fashion as a strong conversation. This has now changed as the tribe of digital citizens continues to grow exponentially. We went live with our e-commerce website in 2020 and it has given us the chance to have an omnichannel presence reaching customers across India, and opened doors to an international customer base as well.”
Much of the e-commerce boom in India has been driven by an increase in Internet and smartphone penetration. “As of July 2021, the number of Internet connections in India significantly increased to 784.59 million, driven by the “Digital India” programme. Out of the total Internet connections, ~61 per cent connections were in urban areas, of which 97 per cent connections were wireless,” says the IBEF report.
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Luxury on tap
One of the key players that has benefitted from the boom in online sales is Tata Cliq Luxury. According to the company’s Global Head Luxury, Gitanjali Saxena, while unwilling to share exact numbers, says that they have witnessed high triple-digit growth. “We’ve added several new brands, thus expanding our portfolio, and launched new categories too. With the luxury of time, it has allowed the consumer to spend more time on the platform, browsing through several categories and brands before making the final purchase. In a short period, we’ve witnessed a 40 per cent increase in the time spent on the website,” she explains. Saxena is also delighted to note that, “The average consumer's shopping basket has grown a lot bigger, and it's no longer limited to a single category or brand.”
Saxena says the categories that are performing well on the platform are handbags, apparel, footwear and watches. She adds, “Sneakers and athleisure are driving new customers to our platform. We are witnessing a strong digital adoption for high-end watches, thus supporting the growth of this category. We see beauty, home and jewellery as the growth categories for the platform.”
“[Earlier] around 30 per cent of Indian luxury consumption happened overseas. Due to Covid- induced travel restrictions, this demand was fulfilled by the domestic luxury sector. Additionally, contained guest lists and muted festivities left people with more cash on hand, which was channelled towards the luxury sector,” says Anand Ramanathan, Partner, Deloitte India. India is also experiencing one of the highest growth of HNIs in Asia driven by promising economic growth and a flurry of unicorn start-ups. “Additionally, non-metros are contributing 40-50 per cent e-commerce orders of luxury retailers. Luxury retailers have leveraged services such as digital appointments, video-assisted sales and offering trials at home to fulfil the growing demand in a safe way,” he explains.
Tahiliani Parikh goes on to share that it was during the pandemic that shopping became an even more personal experience. “During the pandemic, when offline [shopping] was on standby, we offered our clients from across the world virtual services to create an intimate shopping experience, right from Zoom calls to connecting them to the designers, with our teams helping them on how to share measurements, to sharing swatch samples, sketches and, finally, shipping their made-to-order garment,” she elaborates.
“SNEAKERS AND ATHLEISURE ARE DRIVING NEW CUSTOMERS TO OUR PLATFORM. WE ARE WITNESSING A STRONG DIGITAL ADOPTION FOR HIGH-END WATCHES, THUS SUPPORTING THE GROWTH OF THIS CATEGORY. WE SEE BEAUTY, HOME AND JEWELLERY AS THE GROWTH CATEGORIES FOR THE PLATFORM.”
Gitanjali Saxena
Patel points out that what eased the online shopping for her was the prompt replies she received from brands she wrote to with her queries. Several brands have invested in this feature, realising the value of swift communication. “We have introduced assisted sales, a round-the-clock chat designed to offer real-time advice to customers looking to purchase high-end watches. We have seen several customers calling us to speak to our assisted sales team and then going ahead with the purchase. Hence, for high-end products, it works as a lead generator,” shares Saxena.
The rise of the social media influencer
The Bain & Company report, like several others, credits social media and the influencer culture with the growth in e-retail. “Approximately 40 per cent of online shoppers made at least one purchase through social media channels (e.g. Facebook, Instagram, WhatsApp) in 2020. Content creators and influencers will play an increasingly critical role in the future of commerce,” states the report.
Social media, particularly Instagram, has played a significant partin converting our reluctant shopper, Patel, into an e-sales expert. “I would scroll endlessly through the app at all times, trying to identify styles that I liked,” she says. And what about the role of celebrities and other influencers? “I follow certain accounts that give me practical information on where to source the outfit or the make-up I want.” On her feed are all the majorbrands, and Patel cites influencers like Diipa Büller-Khosla, Mira Rajput Kapoor, Kritika Khurana and Masoom Minawala Mehta who make a difference to her shopping palette. Additionally, Patel follows celebrity stylists like Anaita Shroff Adajania, Ami Patel and Shaleena Nathani who style Bollywood A-listers–Deepika Padukone and Alia Bhatt among others.
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“Comprehensive influencer programme of marketplaces and growth in social selling signify the importance of influencers. Platforms such as video commerce, social reselling, group buying, social network and conversational commerce are used to influence sales. E-commerce has built its own platforms along with events to nurture the influencer community. About 70-75 per cent of purchases are made from a known entity,” shares Ramanathan.
Tahiliani Parikh also is quick to credit the social media factor in driving growth, “Instagram is the most popular platform with its engaging content-creation opportunities and formats. We [at Ensemble] have leveraged the visual power of social media to build a narrative around multi-designer styling in order to educate the consumer of how to create bespoke looks from across diverse brands while reinforcing the aspirational quality of our offering. This has given us higher engagement as compared to traditional formats of promoting sales and singular collections.”
What lies ahead
With more than 95 per cent of India’s pin codes now accessible to deliveries, e-retail has democratised shopping. It has empowered India’s small businesses and pushed through market barriers for old and new brands. “Although we have seen the greatest shift online among young consumers, other key segments including middle-aged and older consumers are also seeing significant numbers starting to go online for their shopping needs,” says Sandeep Komaravelly, former Director of International Growth at Shopify.
Market reports and retail experts anticipate a growth of 25 per cent–30 per cent per annum over the next five years, with the e-retail market expected to grow to $120–140 billion by 2026. Small towns, along with tier-two and tier-three cities, will lead the growth, accounting for four out of five new shoppers. Crucial to this growth, of course, are women like Patel and older shoppers who are expected to adopt online shopping in a continuing trend.
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