The ecommerce ecosystem is gaining significant traction in India's tier III cities, with consumers in these regions increasingly dedicating more time and money to online shopping. A recent report indicates that over half of tier III city consumers spend approximately three hours per week shopping online, surpassing the average time spent by their counterparts in larger cities by an hour.
According to the ‘Net Impact of Ecommerce on Employment and Consumer Welfare in India’ report by the policy research institute Pahle India Foundation (PIF), 40 per cent of the respondents in tier III cities have stated that they spend more than Rs 1,000 on online shopping on monthly basis. On the other hand, 30 per cent of respondents in tier I and II cities spend the same amount on online shopping per month.
The consumers from tier I and II cities spend around two hours per week on online shopping, as per the report.
The ecommerce boom occurred during the Covid-19 pandemic as about 30 per cent of consumers started their online shopping journey during the pandemic. The clothing, footwear and apparel segment cashed in on the opportunity as about 60 per cent of new shoppers belonged to these categories. 93 per cent of these consumers continued to shop online for clothes and footwear, even when the pandemic was over.
Underscoring the lasting impact of the pandemic on the behaviour of consumers, the report stated that around 74 per cent of consumers who adopted online shopping during the pandemic continued to take the ecommerce route even after the Covid-19 pandemic got over.
The answer to the question of why consumers prefer taking the online route while shopping is the convenience that they get while shopping online. The report revealed that consumers prefer the cash-on-delivery (CoD) payment method due to its convenience. Healthy competition drives consumer welfare. Factors like product quality, innovation and the variety of platforms available make things easier for the consumers.
While one-third of the consumers reported that the shipping, exchange and subscription fees associated with online shopping have risen over time, 71 per cent of consumers feel that the discounts that they get on ecommerce platforms have increased over the past few years.
The growing ecommerce landscape in the country has made it non-negotiable for the vendors to improve on certain aspects. Nearly 59 per cent of online vendors are now making efforts to provide better product descriptions to consumers, while 54 per cent of such vendors are offering discounts in an attempt to lure consumers along with improving consumer welfare.
On the offline front, about 25 per cent of the offline vendors are now planning to expand their operations by either buying a new store or renovating their existing store along with diversification in their product range or listing on the ecommerce platforms.
To retain consumers, 66 per cent of offline vendors are now taking the relationship retailing route by introducing loyalty programmes and membership subscription offers. The report revealed that 60 per cent of such vendors are making efforts to optimise their store layout to enhance the visibility of their stores, as the ecommerce ecosystem is taking over the market.
