Top five consumer trends in the post-pandemic world

Top 5 consumer trends

By Kapil Makhija, CEO, Unicommerce

When we thought it’s over, it came back again. Yes, the second wave of Covid cases have shattered our expectations greatly. But all things are not gloomy at this front. As we have witnessed a new era where consumer buying behaviour has shifted online. So, what are those changes that made an entrance in the consumer buying trends? Kapil Makhija, CEO, Unicommerce penned down his observations here.

The world has been dealing with one of the biggest pandemics faced by mankind and people quickly adapted themselves to live in this new world of facemasks, social distancing, and video calls. It has led to the beginning of a new virtual era, where remote working and online shopping are the new normal. Consumers have embraced e-commerce with open arms and it’s going to be considered as the beginning of a new era for the e-tailing industry. It’s no mystery that the e-commerce business has seen an unprecedented uptick in the last six months, and consumers are habituated in buying stuffs and booking services online-here we can analyze the shift in consumer behavior triggered by the lockdown. 

Businesses across sectors are moving online and India’s e-commerce industry is expected to report the greatest growth ever witnessed. There are new emerging sectors like FMCG and Personal Care which were predominantly offline and are now seriously considering an online business. There is also a sharp increase in consumer shopping from the brand website.

Given the rising number of online shoppers and the maturing ecosystem, here are five key consumer trends that are going to thrive in the ever-evolving e-commerce ecosystem.

Personal Care and FMCG: The rising stars 

Since the beginning of e-commerce in India, fashion and electronics have been the most popular category as they have been the key volume and revenue drivers for the e-commerce industry. The fashion segment has the largest share of order volume and the electronics segment leads the charge with a maximum share of GMV. However post-pandemic the e-commerce industry has seen people shopping across categories and the biggest gainers have been Personal Care, Beauty and Wellness (PCB&W), and FMCG & Healthcare (F&H) segments. As per the e-commerce trends report by Unicommerce and Kearney, the PCB&W segment saw volumes grow by 95 per cent supported with order value growth of 69 per cent in Q4 2020 as compared to the same period last year. The personal care segment has seen a rising number of new-age digital players that have created a mark and are giving tough competition to traditional brands with a global presence. FMCG & Healthcare (F&H) is another category that has benefited from people’s reluctance to venture out. The steep growth of FMCG has been due to a significant rise in first-time online grocery shoppers, making it an important category for mainstream e-commerce players like Flipkart and Amazon to actively focus and promote the grocery business. The report also stated that the FMCG category has reported an accelerated value growth of 94 per cent in Q4 2020 compared to the same period last year and the average cart value also increased by 33 per cent with an increasing number of consumers making bulk purchases. 

Emerging e-commerce models, social commerce & WhatsApp commerce on the rise

Social media plays a key role in the formulation of opinions and influencing people. In simple words ‘Social Commerce” is a way of influencing consumers to make purchases while they are using a social media platform. The social commerce platforms empower small sellers to sell products to their network and these companies take care of their logistics and operations part, and primarily work on the commission model. Some of the leading companies in this space are Mall 91, Meesho, Roposo, SimSim, and Bulbul are becoming popular amongst consumers in Tier II and Tier III cities.

Another interesting format is WhatsApp commerce. WhatsApp is already being used by a large number of small business owners to conduct business through messaging and sharing pictures. In the last few years, we have seen the emergence of companies those have designed WhatsApp chatbots for retailers, which help them manage a large number of orders using AI. Now with the NPCI allowing UPI payment through WhatsApp, it’s expected to become one of the biggest social commerce platforms. 

Bharat Consumers: Real drivers of e-commerce growth

Until a few years back, e-commerce was considered as a retail choice of consumers from metropolitan and Tier I cities. Even today these cities continue to command the lion’s share of the overall country’s order volume, but there is a gradual increase in demands from Tier II and Tier III cities of India. Especially post lockdown, the e-commerce adoption rate in Tier II and Tier III cities has increased phenomenally. The recent “E-commerce Trends Report by Unicommerce and Kearney” stated that the Tier II and Tier III cities accounted for a whopping 90 per cent YOY incremental volume and value growth in the last quarter of 2020. The report also mentioned the total contribution of Tier II and Tier III+ cities increased from 32 per cent in Q4 2019 to 46 per cent in Q4 2020, eating up the 14 per cent share of traditional metropolitan and Tier I cities. The growth of these cities is supported by multiple factors like the rising adoption of social commerce, faster and timely deliveries, content in vernacular language, and the rising adoption of digital payment coupled with greater internet penetration.

Brands going Direct-to-Consumer

As the increasing number of consumers shop online and the e-commerce ecosystem starts to mature, there is an increasing number of brands that are setting up their online store and consumers are also preferring to buy directly from brand websites. Brands’ own websites are finally turning a page in the Indian e-commerce space. The increasing numbers of brands are adopting the D2C strategy with renewed vigor to develop a strong connection with consumers. According to the “E-commerce Trends Report by Unicommerce and Kearney”, the number of companies investing in developing their own websites has increased by 51 per cent YOY in Q3 and 66 per cent YOY in Q4 2020. Brand websites are growing at a much faster pace, they have recorded a startling growth of 94 per cent in Q4 2020 as compared to the same period last year, while the marketplaces saw a growth of 58 per cent during the same time frame. As an increasing number of brands looking to build unique online positioning, it will be interesting to see how they continue to manage to attract customers and fare against marketplaces.

Value conscious customer with great shopping experience

Value-conscious is not to be confused with discounts. Such buyer is the one who tries to find the best possible product or service and is also okay to pay a premium for a great shopping experience. Post pandemic, the discount offered by brands has reduced significantly, however, the demand continues to increase across all categories. While the demand has increased, the average order size has decreased, as consumers are spending judiciously considering the inflation and uncertain market conditions. 

Today’s consumers also value and expect a great shopping experience, therefore brands need to invest time and effort in building robust business operations that can ensure timely and error-free deliveries. Companies are investing in forward and reverse supply chain capabilities with technology-led integration that helps them automate the processes and improve business efficiency. 

To conclude, I must say we are in for a long overhaul where both businesses and consumers are going to see more new trends and habits in offing.

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