Tier 3 cities drive e-commerce evolution in 2020, Flipkart’s new report reveals

Flipkart registered the highest growth for new sellers on-boarded from these regions. It also posted a 2.5x increase from pre-COVID* to the festive period in terms of native languages adoption.

Flipkart sees Tier 3+ markets as the new frontier for e-commerce (File Photo)

Flipkart on Friday released a new report that sheds light on the evolution of e-commerce in 2020, the year that saw Covid-19 pandemic disrupt economies around the world. According to the e-commerce company, the pandemic led to millions of people turning to online shopping platforms. The transition was not limited in metros but also tier 3+ cities, it added.

“From changes in category preferences, the emergence of the “new essentials” to the adoption of native languages and surge in new-age forms of payments, this year has borne witness to an array of unique consumer trends,” said Flipkart in its report.

According to Flipkart, the company saw a new user growth of close to 50% right after the lockdown with tier 3+ regions posting the highest growth of 65% during the Unlock (July-September period) phase. Tier 2 and tier 3+ consumers also topped the time spent on the platform. It further pointed out that the adoption of native languages saw a 2.5x increase from pre-Covid to the festive period (January to November 2020).

As expected, digital payments were also high this year. UPI adoption on Flipkart increased nationally by 4.5X from January 2020 to August 2020, with Maharashtra taking the lead with a 5.2X growth. Andhra Pradesh, Telangana, Kerala, Karnataka and Tamil Nadu were the other states that were at the top of the list for UPI adoption on the Flipkart platform.

Even as consumers benefited from a deeper coverage of e-commerce platforms, sellers also leveraged the e-commerce platform. On Flipkart, there was a close to 35% increase in sellers onboarding in 2020 in comparison with the same period last year. Interestingly, the new sellers came mostly from tier 2 and tier 3 regions such as Tirupur, Howrah, Zirakpur, Hisar, Saharanpur, Panipat and Rajkot. They primarily catered to categories such as Household needs, Women's Ethnic Wear, Grooming, Home Decor and Toys & School Supplies.

Flipkart pointed out a change in priorities for consumers before, during and after the Covid-19 lockdown in India.

“Pre-Covid, the most searched products included Personal Care, Men's Clothing, Footwear and Women's Clothing. During the lockdown, Food and Nutrition, Household, Toys and Audio products witnessed the highest demand,” it added.