The growth of shopping across e-commerce platforms is slower than anticipated. Data from Unicommerce, a provider of warehouse solutions for e-commerce, shows a 16% year-on-year volume growth in the March quarter, which is lower than the 19% growth in the previous quarter. This slower growth aligns with industry discussions on sales trends.
Consulting and market research firm 1Lattice has predicted a 35% growth in e-commerce for the financial year 2023. However, the six months leading up to March have witnessed a considerable slowdown, according to their analysis. The report suggests that the initial surge in online shopping during the Covid-19 pandemic is now diminishing.
Kapil Makhija, the CEO of Unicommerce, remains optimistic about the overall numbers, stating that e-commerce is still growing at a double-digit rate, although slower compared to previous quarters. He also highlights a significant shift in consumer purchasing habits, with e-commerce gaining ground against traditional retail channels.
Executives in the industry attribute the slower growth to factors such as a reduction in discounts from new-age brands due to funding constraints and a general slowdown in consumption. While overall growth rates are slower, premium smartphones continue to drive value growth in the smartphone market, despite a decrease in volumes. Counterpoint Research data shows that smartphone shipments in India declined for the third consecutive quarter, with a 19% year-on-year decline in the fourth quarter of FY23.
Overall, the data indicates that e-commerce growth in India is facing challenges and experiencing a slowdown, especially in the smartphone category. However, industry insiders and experts remain optimistic about the long-term prospects of e-commerce, citing the enduring shift in consumer behavior towards online shopping.