Tuesday, 14 Jan, 2025
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Rising confidence in e-commerce, driven by home delivery convenience and easy product research, is eroding physical retail's dominance in previously offline-focused categories.
A growing shift to e-commerce is solidifying as India’s online shoppers drive a surge in electronics sales. Online channels now command 34 per cent of the market, up from 32 per cent in 2023, reflecting a Rs 11,000 crore shift from brick-and-mortar stores to digital platforms, The Economic Times reported, citing a NielsenIQ study. Online sales of electronics, including smartphones, laptops, and large appliances, are projected to hit Rs 2 lakh crore in 2024. Shoppers are increasingly comfortable purchasing big-ticket items such as washing machines and air conditioners online, the study noted.
More significantly, the country’s e-commerce sector grew 12 per cent year-on-year during the 2024 festive season, generating a gross merchandise value (GMV) of $14 billion, Redseer Strategy Consultants reported last month. The growth reflects changing consumer behaviour and rising demand from smaller cities, particularly in Tier-II and beyond.
The report, however, highlighted a maturing e-commerce market, with a 5-6 per cent rise in per-shopper spending offsetting slower overall shopper growth. The demand for premium electronics and large appliances was led by the metro cities, while frequent purchases of affordable fashion and beauty products sustained growth in smaller towns.
Quick commerce marketplaces such as Blinkit, Zepto, Swiggy Instamart, and BigBasket are tapping into the growing trend of diversification, expanding their offerings to include electronics and durables alongside traditional groceries. This shift includes items such as kitchen appliances, small domestic devices, and smartphones, signalling a significant change in consumer behaviour. Also, consumers are willing to purchase high-involvement products online, bypassing the traditional touch and feel experience. This growing confidence in e-commerce is fuelled by the convenience of home delivery and the ability to easily research products before making a purchase, effectively challenging the dominance of physical retail in categories once considered better suited to in-person shopping, the study said.
Worth mentioning here is that the decision-making process has become easier, with many consumers conducting thorough research on brands and models before making purchases. This development demonstrates a massive shift in the retail landscape, where convenience and trust in digital transactions are reshaping consumer expectations, enabling platforms to challenge traditional brick-and-mortar stores in categories that were once considered less suited to online shopping.
According to NielsenIQ data, online sales of IT products, including laptops and tablets, have soared from 40 per cent of total sales in 2023 to 43 per cent in 2024, as of October. This trend is also evident in the broader consumer durables sector. The online share of washing machine sales has risen from 22 per cent to 24 per cent, while air conditioners (ACs) saw an increase from 10 per cent to 12 per cent. Refrigerators also experienced growth, with online sales rising from 17 per cent to 18 per cent. These figures reflect the growing consumer preference for online shopping, even for higher-value, durable goods, driven by convenience, competitive pricing, and the increasing confidence in digital platforms.
The consumer survey reveals a significant shift in shopping behaviour, with 33 per cent of consumers now purchasing new electronic products online, up from 26 per cent in 2021. This increase reflects the growing confidence in e-commerce platforms, as consumers become more comfortable buying high-value items like electronics online. The rise in online shopping is driven by the convenience, better price comparisons, and the ease of home delivery, making it an increasingly popular choice for electronics purchases.
Additionally, the 2024 festive season highlights a significant transformation in India’s retail sector, driven by the rising purchasing power in Bharat, particularly among consumers in Tier-II cities. These emerging markets are increasingly embracing e-commerce, driving the broader growth of online retail. At the same time, the rapid expansion of quick commerce services is reshaping consumer expectations, with 10-minute deliveries becoming a benchmark for convenience. This fast-paced delivery model is set to revolutionise the shopping experience across India, further solidifying online shopping as the dominant retail channel.
