Growth Of Ecommerce In India Being Hampered By Inflation

In the current fiscal year, day-to-day delivery of goods in the Indian e-commerce sector is anticipated to increase on a yearly basis by 20%, which is a lower growth rate in comparison to the previous 2 fiscal years. This statement can be made since at the time when the e-commerce sector encountered challenges due to nationwide lockdowns, the e-commerce sector was still experiencing around 25% to 30% growth rate, due to a big shift towards online shopping platforms following the covid-19 pandemic.

As per reports that have come out, in spite of having bigger discounts this year in comparison to non-sale days, merchants, and logistics and e-commerce experts claim that the Amazon Prime Day sale, as well as comparable Flipkart sales events that are taking place, have not experienced an exceptional increase in the previous year.

According to one source who is familiar with the matter, the downtrend in the purchase or consumption of goods can be seen in both online shopping as well as physical store shopping. Following the month of March, quite often there will always be a sale, however, this year there hasn’t been one. Although the purchase of non-essential products has been delayed due to inflation and the growing economic scepticism, it may yet improve before the holiday season sales begin.

Giant corporations in the Fast Moving Consumer Goods or FMCG sector have exhibited concerns as well, with regards to declining volumes as such trends arise. According to the Chief Executive Officer (CEO) and Managing Director (MD) of the FMCG firm Hindustan Unilever Limited or HUL (NSE: HINDUNILVR), Sanjiv Mehta, the diminishing volume as well as inflation had increased the strain on their company.

In recent years, e-commerce companies have set their attention on providing financing options to customers, in order to enable them to make major purchases. It mostly focuses on the purchase of high-priced products such as smartphones, and also large-size appliances. The two e-commerce giants in India, Inc and Flipkart, have co-branded credit cards for customers in association with banking institutions in addition to providing Equated Monthly Installment (EMI) payments and Buy Now Pay Later (BNPL) financing.

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