Main tech cities – Bangalore, Pune and Hyderabad together contributed to 12.6% of the national revenue through the e-commerce festive season sales, says Increff Report 2021. They are perceived to spend more on high ASP products, compared to the national average. However, their spending pattern was found to be similar to the rest of the country.
The report states that East India bought high value items at a lower discount percentage and out-performed West in terms of revenue contribution. It described North East as a potential market for premium high ASP products, however, a high COD (cash on delivery) percentage here, compared to national average, indicates the need for improvement in logistics and faster order fulfillment with distributed warehousing.
High COD percentage
The high COD percentage last year is due to restrictions during the COVID-19 pandemic that disrupted on-time order fulfillment and shoppers were unsure if their purchase would reach them, the report says. The COD percentage of the East region was nearly double that of the West. This highlighted shoppers’ fear of order cancellations due to inconsistent delivery time and uncertainty or delay in order fulfillment. Since the restrictions have now been uplifted, shoppers are now trusting online payments and finding comfort in online shopping.
Increff believes that brands and e-commerce businesses need to first establish trust by improving delivery times with faster order fulfillment and reducing order cancellations. With distributed warehousing and intelligently splitting inventory and placing it closer to the customer, brands can choose to fulfill orders from regional warehouses. This will improve order fulfillment rates, reduce logistics costs and delivery times and increase customer satisfaction.
Women shop more online compared to men
The Increff Report acknowledges that more women, driven by discounts, shop online compared to men. It said both men and women are clearly driven by discounts however, women buying is much more influenced by discounts which is also reflected in the ASP. Kurta sets and kurtas, were by default go-to-choices in the fashion color segment for women, and with winter season around the corner, the contribution of sweatshirts (42%) and jackets (37%) for women’s category in fashion colors is on the rise.
Brands saw a higher revenue contribution of sweatshirts (44%) and trousers (56%) in fashion colors when compared with average fashion color contribution across all categories (38%). Men bought more trousers in fashion colors (60%) compared to women (32%) which shows their inclination towards experimenting with fashion colors at lower ASPs.