Indians bought products worth $44.5 billion from e-tailers in the financial year 2022-23 as e-commerce platforms expand their footprints with one out of three users now tapping online shopping sites every month, says a new report.
Fulfilled gross merchandise value (GMV), which factors out returns and cancellations in GMV, grew about 67% from $27.6 billion in the financial year 2021-22, the report by strategy consulting firm Redseer Strategy Consultants said.
The growth comes despite inflation, which has impacted offline retail consumption more in the recent quarters. It is driven by maturity in user base, with close to 65 million users transacting on a monthly basis, a 30% jump from the previous year.
Consequently, the advertisement-revenue from online retailers grew about 37% to $1.2 billion in FY23 due to improved customer targeting and higher conversion rates. The ad-revenue accounted for about 2.7% from fulfilled GMV, in tandem with global peers such as the likes of Walmart and Alibaba, which also derive less than 3% of their revenue from ads.
The ad-revenue from e-tail market accounted for about 15% of the digital-ad market in FY23.
More than half of the 210 million average annual transacting users are from non-metro and tier I cities.
Further, fashion became the largest category accounting for 27% of the e-tailing overtaking mobile phones, which has historically had the largest share, according to the report. The category is growing at the rate of about 37% on a yearly basis.
“Increasing share of women shoppers in the online shopper base has resulted in an explosion of fashion sales,” the report further said.
The fastest growing categories are grocery, beauty and personal care, and home and furniture segment, all of which grew at over 30%, however on a small base.