Ecommerce majors Flipkart and Amazon are seeing a sharp recovery in sales as pent up demand for a range of non-essentials is restoring overall industry volumes lost during the nationwide lockdown to stall Covid-19.
Brisk sales of smartphones, laptops, tablets, kitchen and home appliances– in the week since all items were permitted to be sold online– has brought sales back to about 70 % of pre-Covid 19 levels compared to the preceding month’s average, multiple executives told ET.
This may taper off in the coming fortnight as consumers continue to purchase only need-based products and delay discretionary spends, the sources said.
“Demand is back by 70-80% but we still face supply chain constraints as sellers are based in containment zones, there is manpower shortage, and implementing social distancing norms slows down processes,” said a top e-commerce executive.
The sale of essentials and grocery products continue to be robust and is expected to double in terms of overall sales to $3 billion this year, according to Forrester Research.
Apart from smartphones and laptops required for communication and to work and study from home, other fast-moving items include electronics such as headphones and power banks, as well as home and general merchandise according to data shared by online marketplaces.
In the beauty and wellness category brands have registered a spike. Wow Skin Sciences, a skincare brand, saw its orders grow 2.5 times over the past seven days, according to its cofounder Manish Chowdhary. This sentiment was mirrored J Suresh, MD, Arvind Lifestyle Brands, which operates Sephora in India. “Our data shows that the beauty category has seen a huge uptick,” he said.
The uptick in sales is prompting more merchants to come online, with Amazon India reporting a nine-fold increase in the number of operational sellers since the lockdown regulations were eased on May 18. Flipkart did not respond to ET’s query.
Fashion, however, took a backseat with a tepid recovery of only 30% of sales returning with categories like tops, T-shirts, athleisure items and inner wear selling well, while demand for big ticket buys such as formal and wedding wear remained very slow, brands and platforms told ET.
No discounting
Brands and online marketplaces told ET that they are reluctant to offer deep discounts presently as most consumers are looking for products they need and don’t need to be further incentivised. “We have postponed discounting related discussions with marketplaces to June,” said Suresh of Arvind Lifestyle Brands, which runs brands like Nautica, Hanes, The Children’s Place. “Everyone is gauging the situation this month, and since we are primarily casual wear and comfort wear-driven set of brands, we stand to gain as people stay at home. Discounting is not a priority,” he told ET.
Analysts are of the view that similar buying patterns are visible across segments. “(Even) the demand for appliances is need-based, it’s not the usual summertime upgradation which is taking place, so demand is not massive,” said Satish Meena, forecast analyst at Forrester Research.
Read: A look at the changing buying patterns of Indian shoppers
Move from retail to online
Both ecommerce companies and brands estimate there will be a significant shift from physical to online retail as consumers will be wary of returning to brick-and-mortar stores. Sportswear brand, Puma’s Abhishek Ganguly said the uptick in online sales in the past week is largely due to consumer preference to shop from home. Even as sales in the German brand’s retail stores continue to be down, the average shopping basket size has increased by 17% in terms of units bought according to company estimates.
“In-store health and safety is our key focus, and we have undertaken a lot of measures right from people entering the store to ensuring that all garments and footwear that a customer tries on are put in quarantine box,” said Ganguly.
Read: India’s online grocery market may clock $3 billion sales in 2020
However, even as stores continue to take these precautions, fashion forms a part of the discretionary spending wallet. Arvind Lifestyle’s Suresh cautioned that given the macroeconomic situation including job losses and income cuts, it will take fashion up to a year to regain pre-Covid sales volumes. He did say he still believes that it would be the fastest discretionary category to recover.
According to a Snapdeal spokesperson, this trend will play out across categories. “We expect spending to remain cautious as users balance needs with income uncertainties,” he said.
Read: As ecomm resumes delivery, parents rush to buy toddlers’ clothes
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