Online retail will continue to flourish despite offline retail picking: Dhiraj Gupta of mFilterIt

Offline retail is catching up slowly to come at par with online e-commerce platforms, but in the post-pandemic times, the consumer has developed a preference for online shopping which is why the e-commerce festive season sales were a massive hit, as indicated by industry reports.

According to Dhiraj Gupta, Co-Founder and CTO, mFilterIt, the shift in consumer shopping preference towards e-commerce shopping in India has not been impacted post-pandemic.

“Instead, the pandemic has pushed shoppers towards online shopping and 78% of consumers prefer checking a product online before peeking at the local stores,” he added.

Retailers Association of India’s latest survey report also highlights that retail sales grew 15% year-on-year in October, and increased 19% compared to pre-covid levels.

As per the recently released report by Criteo, Diwali 2022 witnessed a 17% increase in online sales for two weeks before Diwali as compared to the corresponding period of the previous year.

Criteo’s report also highlighted that the sales for Arts and Entertainment grew by 33%, for Food, Beverages and Tobacco by 23% and for Furniture by 17% in the period of two weeks prior to the festivity this year.

Furthermore, stuffed animals (+50%), mobile phones (+48%), pants (+35%), and indoor and outdoor plants (+34%) also showed the highest average index just the week before Diwali, the report highlighted.

Moreover, mFilterIt’s Gupta also ascertained that in the post-pandemic world, the Tier-II and Tier-III towns have also shifted towards online shopping which has further increased sales in e-commerce. 

Similarly, another recent report released by DoubleVerify also highlighted that online shopping continues to grow as 54% of consumers report buying more items online now than they did pre-pandemic.

Meanwhile, the report also highlighted that consumers in emerging markets are more likely than average to state they are shopping more online now than they did in the pre-pandemic world, with this highest among Indian consumers, at 74%.

“With platforms like Meesho emerging, the demand for eCommerce in Tier-2 and Tier-3 towns has grown. This impacted the overall growth in demand during the festive season,” he stated.

As per Hansa Research’s Consumer Sales Survey too, consumers prefer online shopping over offline shopping at the time when several shopping sales were active in physical stores as well as on e-commerce platforms in the period between July and September 2022.

However, in the recent slew of layoffs happening at the global level with social media giants like Meta and Twitter announcing massive furloughing, e-commerce giant Amazon had also announced that it’ll be letting go of over 10,000 employees.

Explaining the reason behind such a move, a news report published in NYT stated that the e-commerce player had witnessed a ‘breakneck expansion’ during the pandemic owing to the surge in demand and since then had been ‘under strain’ for over-investing and rapidly expanding.

This is also to be noted that e-commerce players often opt for seasonal hiring during the festival period to accommodate and meet the demand requirements. Earlier, Flipkart India had also announced that it would increase its seasonal workforce from 1,15,000 people to 2,50,000 people for the festive period.

Speaking as to whether Amazon has received dented sales owing to high inflation and changes in shopping habits in India as well, mFilterIt’s Gupta said that the current layoffs in Amazon have happened due to the recession in the US and have not impacted the eCommerce scenario in India heavily.

“Moreover, the layoffs included the shutdown of one of the many segments of the eCommerce giant,” he stated.

As per Redseer, a consulting firm, the current year’s festive season sales saw Flipkart emerge as the leader at the first position with 49% market share and 62% share in Total Gross Merchandise Value, Meesho at the second position with 21% and Amazon at the third when it came to market share, but second when it was narrowed down to GMV as it clocked in 26% Total GMV during the period.

Commenting as to what worked well for Meesho and Flipkart as they took over Amazon in the festive season in terms of sales, mFilterIt’s Gupta said that with government’s initiatives like ‘Vocal for Local’, Indian shoppers’ behaviour is shifting towards consuming products by Indian brands.

“This festive season, over 96% of shoppers have expressed an interest to shop from local brands,” he stated.

Furthermore, Gupta also went on to add that e-commerce brands like Flipkart and Meesho who were also seen promoting local businesses had not only registered an increase in the demand for the products available on their platform but also created a shift in consumer behaviour towards online shopping.

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