KEY TAKEAWAYS
1. Consumer spends in the last quarter was robust across online and offline retail, as GMV grew alongside a moderating inflation and rising income levels.
2. The eCommerce spending sentiment for Q2 FY24 remains positive with an ECCI (eCommerce Consumer Confidence Index) of 131 with a minor dip from the previous quarter.
3. The net promotor score for eCommerce has improved, driven by increasing trust and overall satisfaction with online platforms.
Redseer’s latest report shows positive trends in consumer spending for both offline and online retail. In Q1FY24, retail commerce grew as inflation cooled and incomes rose. Offline retail outpaced eCommerce, driven by higher rural demand (particularly FMCG) and a steady uptick in urban demand.
Redseer conducts a quarterly survey to assess the consumer sentiment towards eCommerce spending and adoption in the following six months. Our survey conducted in the 1st week of July indicates an optimistic consumer outlook towards Q2, with an ECCI of 131. This is a slight decline from an ECCI of 142 in Q1 FY24.
Over 45% of the respondents plan to increase their eCommerce spends, largely across the categories of fashion, grocery, beauty, and personal care. There is also an increase in the Net Promoter Score to 52% as eCommerce platforms work towards building consumer trust and continue to perform well on their key customer satisfaction drivers.
However, with the eCommerce sector approaching maturity, the adoption of new categories is expected to be muted. Most non-users also tend to remain sticky (prefer offline retail) as only a few consumers are willing to try online shopping over the next 6 months.
“ECCI for Q2FY24 underscores that eCommerce will continue to be a key driver for retail growth and consumer spending, driven by existing users. However, given the slowdown in new user adoption, going forward companies will have to craft their strategies for preimmunizing their offerings, devising upselling and cross-selling schemes, and developing loyalty programs, with a continued focus on customer satisfaction”, stated Mohit Rana, Partner at Redseer Strategy Consultants.
