The e-commerce industry has been growing steadily in India since 2010, with the advent of cheaper handsets and affordable broadband internet packages. Presently, the total internet penetration in India is over ~ 83 Crores with broadband comprising close to ~ 78 Crore connections. This makes India one of the biggest internet markets in the world. Currently, the price of 1 GB of internet in India is less than INR 8 and is lower than other major emerging economies in the world such as China, Israel, Poland, Thailand, etc.
Lower internet prices in conjunction with expansive digital penetration and young demographics (65% aged below 35) have steered growth in India’s e-commerce market. Another factor that has been instrumental in the growth of internet-driven commerce has been the pandemic.
The COVID-triggered crisis influenced millions of Indian households to embrace the internet and get items delivered to their doorstep. Amidst restricted mobility forcing people to stay indoors, there was no other option but to order essentials and other requirements online.
Though the pandemic is virtually over, the digital juggernaut continues to move ahead at a scorching pace. Most of the prominent categories such as grocery, fashion & apparel, electronics, etc. are growing at lightning speed. Indians are now very comfortable with online reviews, virtual product displays, and making purchases digitally.
Home Décor E-commerce – An Upcoming Force To Reckon With
Unlike other categories, digital retail in the home décor and accessories segment is still small and is sized at around ~ 2,450 Crores. Together with other complementary categories such as furniture and pillows, this e-commerce space is sized at around ~ 11,000 Crores.
However, the category is thriving and clocking a CAGR of around 20%. Increasingly, users are now moving to the internet to order home accessories items such as candles, lamps, books & paintings, diffusers, burners, rugs, oil burners, ceramics, etc.
Large horizontal e-commerce players such as Amazon, Flipkart, and Myntra have a strong footing in the market. Vertical players such as Wooden Street, Pepperfry, Royal Oak, Urban Company, etc. are also showing robust growth. Meanwhile, amidst an intensifying digital war, D2C players such as Ikea, Rosemoore, etc. are deepening their footprint in the market and becoming a formidable node in the overall ecosystem.
Creating New Value for Customers
A large young buyer base with the increase in disposable income will continue to patronize the industry. Post-COVID, there has been a visible shift towards the idea of home décor. Keeping the house clean, hygienic, fresh, and well decorated is now becoming an indispensable part of the overall lifestyle. The shift in behavior is also evident in Tier 3 & 4 cities, which is a positive sign. Increasingly, buyers are also gravitating towards more eco-friendly and sustainable products as the idea of long-term sustainability is getting interwoven with fashion and lifestyle.
The space will continue to evolve with overlapping space between the horizontals, verticals, and D2C players. Many verticals are now integrating backward to offer private label brands and in-house products besides aggregating other smaller producers. While D2C brands are leveraging Omnichannel distribution with a healthy mix of offline and online retail. One of the advantages of D2C players is that they have control over product quality. This gives them an edge in a category, wherein customer perception and brand loyalty is paramount.
There is a visible pivot to customer centricity, which is very essential to thrive in the midst of intensifying competition. Players are now moving beyond deep discounts to render some real value. Virtual and augmented realities are used to help users visualize products digitally and make better decisions. Likewise, schemes such as EMIs are now becoming in vogue.