Flipkart study reveals Tier-3 customers, vernacular language tech, hyperlocal services are boosting Indian e-commerce

Customers from tier-3 cities, vernacular language and hyperlocal services are driving the growth of e-commerce in the country, as per a recent study conducted by Flipkart. One of the other key findings of the study was that merchants, kiranas, and MSMEs witnessed increased growth this year as compared to 2020.

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Insights from customer indicate that e-commerce is gaining in popularity as it offers greater convenience, user-friendly interfaces enabled by technology, inclusive access to a wide range of products and affordable financial constructs.

Flipkart witnessed a 47% year-on-year (YoY) customer growth in Tier 3+ cities this past year. In Tier 3+ cities, the fashion category had the biggest YoY customer growth of 58%.

The increasing adoption of customers from across the country, particularly Tier 3+ cities, was largely enabled by the rapid expansion of supply chain infrastructure and extended delivery partners. Today, over 1 lakh kiranas onboarded with Flipkart make 30% of the 60 million+ deliveries made per month across the country, offering a very personalized e-commerce experience to millions of customers.These kirana partners also witnessed an increase of over 30%+ in their average delivery incomes compared to last year, as per the study.

It also revealed that Flipkart’s hyperlocal delivery business witnessed a 25X increase in orders compared to last year. The share of hyperlocal orders within total grocery orders on Flipkart increased from 1% in 2020 to over 17% in 2021.

Flipkart has also made deep investments in its grocery business in the past two years as consumers from Tier 2 and 3 markets also embark on the journey of e-commerce buying. The category has seen a 2X growth in revenue and customers respectively in 2021. It is on track to service customers in 1800 cities by the end of 2021, including Ajmer, Amritsar, Bhuj, Bokaro, Daman & Diu, Dehradun and Kanyakumari, among others.

With e-commerce adoption rising fast in Tier 3+ cities, the share of Indian-language users on Flipkart increased from 12% in Q4 2020 to 18% in Q4 2021. Coming to popular browsing categories, smartphones account for 57% of regional language traffic, followed by fashion wearables (44%), and audio devices (39%), as per the study.

It also states that Tier 3+ cities have the highest percentage of non-English users (22%), indicating that regional languages will continue to play an important role in attracting and retaining consumers from these markets. Among the 11 Indian language interfaces on Flipkart, Hindi, Tamil, Telugu and Bengali are the most widely used languages on the platform, growing by over 2X over the past one year. Bengali and Malayalam are witnessing the fastest growth in terms of adoption among new customers.

Kiranas and retailers have shown increased trust and adoption of B2B e-commerce with Flipkart Wholesale witnessing solid growth across categories.

Rajneesh Kumar, Chief Corporate Affairs Officer, Flipkart Group, said, “As India’s homegrown e-commerce marketplace, we are committed to deliver the best products to all customers using the latest technology, irrespective of their location. Flipkart has consistently focused on creating an inclusive e-commerce shopping experience and thereby transforming how India shops. Over the past year, we have empowered our partners, built new capabilities in Grocery and supply chain, and introduced new features on our platform that aim to benefit all ecosystem stakeholders. We will continue to introduce innovations that meet consumers' rising expectations while also empowering sellers, merchants and MSMEs to access the Indian market more effectively and efficiently."

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