Stagnation of requirement from town markets is forcing leading e-tailers in the nation to lean on tier III and tier II cities to drive sales. Not only income, supply from small cities for most e-commerce firms has also jumped to almost 40% by value from almost 10% 2 Years ago. This data was provided by Shankar Ranganathan, AVP of Invest India. Invest India is the investment promotion agency of the government.
For example, at the time of Great Indian Festival Sale of Amazon in October, the US-based retail behemoth witnessed 86% of its new users signing in from smaller cities. In the same way, number of users of Shop-Clues from tier IV and tier III has increased 2x from previous year, the firm claimed. Almost 65% of sales for Flipkart presently arrive from tier III and tier II cities.
“The latest mess and the stagnation of requirement in town populace, boosted by exponential digital development, is almost certainly what is powering online companies to now shift beyond tier I cities and metros,” claimed head of categories for ShopClues, Nitin Kochhar, to the media in an interview. “The tier III market is developing at a much quicker rate in comparison to tier I cities and metros, with 70% of our orders arriving from tier IV and tier III markets.”
Industry analysts point the development to lack of choice for users in small cities and towns as well as rising Internet penetration. “Shops in a city such as Ranikhet will have less item assortment in comparison to neighborhood market in Delhi,” claimed founder of retail consultancy Technopak, Arvind Singhal, to the media in an interview. “So, it is no wonder that with improved logistics, e-commerce firms are capable of meeting some of the requirements from these regions.”
Far-flung regions, comprising Lakshadweep Islands, Andaman & Nicobar Islands’ Port Blair, Tawang in North East, and even Leh in Ladakh have come within range of e-commerce firms.