The lower-income segment constitutes an important buyer base for e-commerce platforms, according to a recent report.
E-commerce platforms are most popular among income groups below Rs 300,000 per annum, and this segment uses them more than other classes, according to a report titled “Assessing the Net Impact of E-commerce on Employment and Consumer Welfare in India” by the Pahle India Foundation.
The report is based on a pan-India survey of 2,031 offline sellers, 2,062 online sellers and 8,209 e-commerce consumers across 35 cities in 20 states and union territories.
Flipkart has emerged as the most popular e-commerce platform among most income groups, while Amazon is at par with it in some classes.
As far as the lower income group is concerned, 22 per cent of users used Flipkart for their shopping needs, particularly when it came to clothing and personal care. The other most preferred platforms for this income category include Amazon at 20 per cent, followed by Meesho at 16 per cent, Myntra at 10 per cent and Nykaa at 2 per cent (Chart 1).
In a slightly higher income group (Rs 600,000-900,000 per annum), only 8 per cent of respondents used Flipkart and Amazon.
Higher income categories also do not seem to use websites like Myntra, Snapdeal, Nykaa, Ajio, Reliance Digital and social media platforms.
The percentage decreases as one goes up the ladder. Among people earning between Rs 12 lakh and Rs 15 lakh per annum, as well as those earning Rs 15 lakh and above, only 1 per cent reported using Amazon, Flipkart and Meesho, while none reported using any of the other platforms mentioned.
One reason for this low turnout could be that many were unwilling to declare their income in the survey conducted by the nonprofit think tank.
Second-tier cities appear to be driving the bulk of sales for the top five platforms (Chart 2). Among respondents from second-tier cities, 83 percent used Flipkart, while in first-tier cities, it was 77 percent.
Flipkart and Amazon remain the most popular across all categories in the city.
According to the report, e-commerce generated 15.8 million jobs. On average, e-commerce created nine jobs per seller, while each traditional seller employed about six people.
Online vendors employed almost twice as many women compared to offline vendors.
The report provided a comprehensive analysis of how e-commerce is transforming India’s economy and its implications for employment and consumer welfare.
However, business-to-consumer (B2C) e-commerce funding has been declining in recent years. It fell from $2.39 billion in 2019 to $290 million in 2023, according to data from market intelligence platform Tracxn. Although it rebounded moderately in 2024 to $390 million, it was still significantly below the 2019 level (Chart 3).
First published: August 24, 2024 | 00:04 IS
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