India's e-commerce grew 77% in one year! Second- and third-tier cities have great potential

Conversational media platform Bobble AI said in a report that Nykaa , which was recently listed on the exchange, saw a 50% increase in active users, while Purplle saw a 70% increase in active users during the 2021 shopping festival.

"The festive season trends indicate a healthy and fast-growing e-commerce market with competition. With the festive season around the corner, the competition in the e-commerce market is expected to get even more exciting in 2022. With the Indian e-commerce market set to touch $120 billion by 2025, the future seems even more promising. The segment is sure to see high growth and as per Bobble AI's findings, brands are well-positioned to grab the growth opportunities," the company said in a statement.

Furthermore, while Tier 1 cities dominated the Fashion Festival data, Tier 2 cities such as Jaipur, Guwahati, Lucknow, Kochi, Mysore and Bhubaneswar recorded record transactions – an increase of 82% compared to the previous year .

The report showed that e-commerce in India grew 77% between 2020 and 2021, with more transactions in tier-II and tier-III cities than ever before. The report is based on data from more than 50 million smartphone users in more than 640 cities in India processed in a privacy-compliant manner, the platform said in a statement.

Most consumers are between the ages of 26 and 35, accounting for 37%, and those between the ages of 18 and 25 account for 26%, of which males account for 72% and females account for 28%.

According to the data intelligence firm's State of E-commerce in India survey, e-commerce beauty app usage grew 64%, while fashion e-commerce grew 368%. In the past year, the festive season saw only two e-commerce segments skyrocket, with at least two transactions completed by shopaholics during the fashion festival.

“India’s fashion e-commerce industry has gradually shifted from being a ‘monopoly’, with fashion giant Myntra facing stiff competition from its rivals Meesho, Ajio and TataCliq.

While nearly 46% of transactions during the festive season in 2020 belonged to Myntra, Ajio accounted for about 69% of all transactions in 2021. The active share of Myntra also saw a significant increase in users using Meesho, Ajio and TataCliq, indicating that users are exploring multiple options this year,” the company said.

Flipkart's active user base grew 83% during the 2021 online shopping festival, compared to 72% for Amazon. Bobble AI said that while Flipkart dominated in engagement metrics such as search frequency and active sessions, Amazon won in terms of transactions and significantly fewer average session times.

Indian e-commerce

Second- and third-tier cities have great potential