Ecommerce growth slows in FY23 as Covid effect evaporates: Report

economictimes.indiatimes.com:

Unicommerce. Growth in gross merchandise value (GMV) also slowed to 23.5% from 73.6%, the company, which helps merchants and brands sell online and manage their inventory, said in a report. Unicommerce chief executive Kapil Makhija said the slowdown in growth was a sign of stabilisation in the ecommerce industry after a couple of years of tailwind gains from Covid-19.

“While macros and the discretionary spending available to customers have played a part in the result, overall it is a sign of the maturing industry,” Makhija told ET. The steep increase in the numbers observed in FY22 was a result of the pandemic, because sales during the 45 days of lockdown in the previous year were not properly captured in its survey, he said. Its surveys also did not cover smartphone sales.

Tier-I cities which included metros and tech hubs such as New Delhi, Bengaluru and Chennai posted significant year-on-year growth of 31.1% in FY23, compared with 10.3% the previous fiscal year. The market share of Tier-I cities, meanwhile, marginally increased to 44.31% from 42.17% in FY22. At the same time, both Tier-II cities (from 50.9% to 23.3%) and Tier-III cities (from 64.5% to 22.4%) saw a major slowdown in growth.

Their market share too shrank to 18.6% from 19.2% and to 18.6% from 19.2%, respectively, between FY22 and FY23. A key reason for this change in growth patterns was consumers returning to metropolitan cities for work after concerns over Covid subsided, Makhija said. While affluent customers will continue to have a high share of demand, growth will eventually be seen from Tier-II and Tier-III cities, he said.