Rise of value e-commerce: Shopsy already accounts for 40% of Flipkart’s new customers

India’s $72- billion e-commerce sector has grown by leaps and bounds, especially post the rollout of Reliance Jio, which put mobile internet in the hands of practically every Indian. While ‘E-commerce 1.0’ — as some venture capitalists call it — sold to the top tier of India’s population or the first 100 million online users, ‘E-commerce 2.0’ is already reaching the next 200-300 million. These customers reside in India’s small towns; they are new to the internet, new to e-commerce, and most importantly, value-conscious and less likely to transact online.

Homegrown e-commerce platforms like Meesho (downloaded 300+ million times) have built large-scale businesses by targeting this group. But, in the last 12-15 months, biggies like Flipkart and Amazon have also entered the ‘hyper-value’ e-commerce segment. Flipkart, India’s largest e-commerce platform by GMV, launched Shopsy in mid-2021 to galvanize hyperlocal entrepreneurs and connect them with tens of thousands of low-income shoppers in Tier 2-3 towns.

“Today over 68 per cent of Shopsy’s customers come from these cities. [And] within a year of launch, Shopsy’s share of Flipkart’s new customers is already about 40 per cent,” Adarsh Menon, Senior Vice President & Head - New Businesses at Flipkart, tells Business Today.

“The potential that lies in this mass of the Indian audience is expected to be the key driver of growth. Digital commerce has enabled Indians from over 95 per cent of pincodes to shop sans borders,” he explains.

Shopsy clocked over 8.5x year-on-year growth in app downloads, becoming India’s third-most downloaded app last year, per Sensor Tower. It had over 140 million installs at the end of 2022. The platform currently has over 2.5 lakh sellers offering a selection of 15+ crore products across categories like Fashion, Beauty, Mobiles, Electronics, and Home. “At Shopsy, we have consistently focused on providing value-based products to consumers, with over 75 per cent of products under various categories costing Rs 300 and below,” Menon reveals.

During the festive season, Shopsy recorded a 6x spike in the number of shoppers. These were primarily budget buyers or trend seekers.

Menon shares, “The first cohort consisted of value-seeking women in the 30-40-year age bracket. In this category, Shopsy witnessed a 4x unit growth in women-centric products like ethnic, contemporary clothing etc. The other cohort was predominantly of 15–24-year-old males from non-metro cities with high brand consciousness looking for a trendy selection of products.”

Shopsy claims to have grown its overall business by 5x since launch, with both metro and non-metro shoppers visiting its platform,  given the availability of low-priced items. Even the number of sellers on Shopsy have jumped 9.5x year-on-year. “Shopsy with its expansive range of value-based products along with a zero-commission model has become the face of the next wave of e-commerce,” Menon says, adding, “Our endeavour is to make digital commerce accessible to every Indian.”