Uptick in discretionary spend propped up retail commerce in April-June quarter: Redseer

economictimes.indiatimes.com:

retail commerce in the April-June quarter, with offline outpacing online, according to a report by internet consultancy firm Redseer. Traction for offline retail also increased on the back of higher rural demand, particularly for fast moving consumer goods (FMCG), the report noted. As incomes grew, the share of discretionary spending in household wallets increased to 19% in April-June, from 15% during the January-March period.

The three-month period ended June also saw a 1% year-on-year growth in discretionary spend, the report added. At the same time, inflation cooled, with retail inflation dipping in May to its lowest in 25 months – at 4.25% – as food and fuel inflation moderated, with prices of cereals and vegetables as well as international prices of LPG and kerosene easing. Both offline and ecommerce grew in the last quarter, with gross merchandise value witnessing an on-year growth of 5%.

“In addition to a consistent upward trend in urban demand, the growth in offline (especially FMCG) is a result of increase in rural demand, lower prices and volume growth,” the report pointed out. Over 45% of the 775 respondents in Redseer’s survey said they intended to increase their ecommerce spending largely across the categories of fashion, grocery, beauty and personal care. The report also noted that while these trends bode well for ecommerce outlook in the current quarter, growth from new users is unlikely across categories.

“With the ecommerce sector approaching maturity, the adoption of new categories is expected to be muted. Most non-users also tend to remain sticky (prefer offline retail) as only a few consumers are willing to try online shopping over the next 6 months,” Redseer said. Those who are willing to try