The Unicommerce Emerging e-commerce segments 2021 Report analyses e-commerce trends for the period of January-August 2021 and January-August-2020 with a sample size of over 40 million orders.
• Health and Pharma growth led by Nutraceutical with 143% jump in order volume
• FMCG reported 73% growth; sub-segments: Food and beverage order volume grew by 72%, and organic food at 74%.
• Beauty and personal care sub-segments: face care segment reported 171% growth; followed by hair care at 92% and body care at 31%
Unicommerce, India’s largest e-commerce focused supply-chain SaaS technology platform, unveiled a first-ever industry trends report on the emerging categories that are changing the dynamics of the e-commerce retail industry. The report titled ‘Emerging e-commerce segments 2021’ highlights segments that had a negligible online presence before the pandemic but have swiftly grown in the last 18 months to increase their overall e-commerce share and become emerging e-commerce segments.
The report further throws light on interesting trends across new segments such as FMCG, Beauty & personal care, Health & Pharma, Home Decor & Furniture, and Sports and Fitness equipment. It also details out the sub-segments under these categories, highlighting how these new segments are growing their e-commerce presence, along with the drivers for growth potential in the coming years. The report analyses e-commerce trends for the period of January-August 2021 and January-August-2020 with a sample size of over 40 Mn orders.
Speaking on the launch of the report Kapil Makhija, CEO, Unicommerce said “The pandemic has altered consumer buying patterns and accelerated the adoption of technology amongst brands at a faster pace. Rising e-commerce adoption has led to the birth of many new segments in the e-commerce industry that were insignificant until last year. Our aim with this report is to showcase the evolving trends in these emerging categories along with detailing the growth trends of sub-segments under each category. An important finding from the report is the phenomenal growth of brand websites and marketplaces and how it’s impacting all these emerging segments. We received an overwhelming response to our previous reports and we are confident that this report will also help e-tailers in understanding the emerging segments and adapt well to the changing dynamics of the e-commerce industry. We are committed to helping e-tailers in their e-commerce journey and this report helps in furthering our mission.”
Some of the key findings of the reports are:
FMCG becoming an integral part of e-commerce:
FMCG is one segment that started making news right from the beginning of lockdown in March 2020. The FMCG e-commerce sector saw a major spike at the beginning of lockdown and it was considered as a temporary phenomenon given the conventional nature of the industry, and consumers were expected to go back to old ways of shopping after some time. Today even after 18 months, the FMCG segment continues to grow at a rapid pace. The changing consumer behavior supported with increasing e-commerce adoption across the country has led to an exorbitant order volume growth of 74% for the FMCG segment for the period of January-August 2021, over the corresponding period a year ago.
The FMCG segment can be broadly divided into two categories and both segments reported almost similar growth as the overall category: The Food and beverages segment reported 72% order volume growth in January-August 2021 as compared to the same period last year, while the organic food segment reported a 74% rise in order volume during the same period.
Beauty & Personal care growing exponentially:
The beauty and Personal care segment was growing rapidly even before the pandemic. The pandemic further accelerated the growth of the industry and the new age digital companies were able to efficiently meet the rising consumer demand with automated supply-chain and digitizations across various cycles of the operation. An increasing number of consumers are now buying beauty and personal care products online, the segment reported 143% order volume growth, highest amongst all the emerging segments.
The segment can be broadly divided into three key segments: The first one is Face care which has always been the most important sub-segment with the widest range of product portfolio and is the real growth driver for the segment with 179% order volume growth in January-August 2021 as compared to the same period last year. The second segment is Haircare, which has garnered a lot of consumer attention and has reported a strong order volume growth of 91% during the above-mentioned time frame. The third segment is Body care, while it’s an important segment it reported a slower order volume growth of 48% in January-August 2021 vs January-August 2020
Beauty and personal care is an interesting category where marketplaces are the real growth drivers with 163% order volume growth for the period of January-August 2021 as compared to the same period last year. One of the key reasons that marketplaces are driving faster growth over brand websites is the gaining popularity and stronghold of platforms such as Nykaa within the Beauty and personal care segment. Myntra has also started extensively focusing on the beauty segments in the last year, with beauty-focused sale events and promotions. Interestingly, brand websites are also catching up with 141% order volume growth. This showcase the rising acceptance of new D2C brands amongst consumers
Health & Pharma: Sector with immense growth potential
It’s a category that is growing exponentially, especially at a time when there is a major focus on building strength and immunity in people. Health and pharma sector continues to grow and reported 119% order volume growth in Jan-Aug 2021 as compared to the same period last year.
Nutraceutical is a subsegment in Health and Pharma that has garnered a lot of attention with its strong growth in the last one year. It includes dietary supplements and herbal powders and medicines with vitamins, minerals, and plants with specific medicinal properties to improve immunity and give necessary nutrition to the body. The nutraceutical segment reported 143% order volume growth from January-August 2021 as compared to the same period last year. They have been in high demand as consumers are focused on building strong immunity against COVID-19.
Home Decor & Furniture and Sports & Fitness Equipments:
E-commerce is also helping the unorganized categories such as- home decor and sports & fitness industry to become part of organized retail and its getting the necessary attention from consumers. The majority of sales in these sectors is still a part of unorganized retail with small shop owners in local market.
The home decor industry growth reported an order volume growth of 51% with a significant GMV growth of 108% leading to the highest average order value growth of 38%. Due to work from home, a lot of consumers ordered office furniture last year and it’s one of the key factors driving strong growth for the home decor and furniture segment.
Sports goods refer to equipment and clothes that are required for participating in sports. It’s a small industry and at a nascent stage of the e-commerce business and it holds immense growth potential with 66% order volume growth, along with muted GMV growth of 18%. This sharp decline in Average order volume can be attributed to limited outdoor activity and an increasing number of consumers ordering essentials for workouts at home
Tier-I cities are the traditional trendsetter of Emerging categories
It’s usually observed that every sector in e-commerce has a trickle-down effect. Any new sector first starts gaining traction in the metropolitan and Tier I cities, and later Tier II and Tier III cities gain traction. This has been observed in mature categories such as Fashion and Electronics. Before the pandemic, the emerging categories used to hold a very small part of the overall e-commerce business, with limited consumers, therefore the market share divide between Tier I, Tier II, and Tier III cities was almost equal. In the first eight months of 2020, Tier I cities contributed 39% market share, followed by 38% share of Tier III cities and 23% of Tier II cities. However, the market shares changed significantly in 2021, with 161% growth of Tier I cities contributing 52% of the overall market share of the emerging segments. Followed by 85% growth of TierII cities contributing 19% of the market share and 75% growth of Tier III cities with 29% market share.