Online sales of retailers like Reliance Retail, Dmart surge 2-9 times during pandemic


India’s largest brick-and-mortar retailers such as Reliance Retail, Dmart, Croma, Aditya Birla Fashion & Retail, and Spencer’s Retail grew their online sales by 2-9 times during the pandemic year in 2020-21 driven by more consumers opting to click and buy when several of their stores either remained shut or operations limited for few months due to Covid-19 restrictions.

As per latest disclosures in annual reports and investor presentations, these retailers said the massive surge in e-commerce sales is likely to be a permanent shift for their business as they seek to expand through the omni-channel model by enabling all their stores for online sales.

India’s largest retailer

Retail said in the annual report that its e-commerce business accounted for 10% of its revenue in FY21 “significantly stepped up from near zero in the preceding year”. This translates to over Rs 15,000 crore sales from e-commerce last fiscal.

Reliance said the e-commerce business is led by its own hyperlocal platform JioMart which was launched during the pandemic and fashion platform Ajio.com which grew three times last year, apart from acquisition of online platforms like Netmeds, Urban Ladder and Zivame.

To be sure, online sales surged for most fast moving consumer companies and even marketplaces such as Amazon and Flipkart since last year’s lockdown. For FMCG, ecommerce contributed a paltry 2-3% until last year, which has now more than doubled for most firms.

Avenue Supermarts, the operator of DMart retail chain, saw sales of its online grocery and household products unit – functional mostly only in Mumbai – more than doubled to Rs 791 crore in FY21 while the business net loss remained stagnant at about Rs 80 crore, according to its annual report.

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Spencer’s Retail and Nature’s Basket managing director Devendra Chawla said in months of lockdown, omni channel mix of business went as high as 30-40% of total sales. He said online business for the company would have grown five times as compared to pre-pandemic months.

High online sales was not just restricted to grocery as the fashion segment, which was considered non-essential during lockdown, saw their ecommerce sales swell over four times.

For instance, at Aditya Birla Fashion & Retail lifestyle division which sells brands like Allen Solly, Louis Philippe, Peter England and Van Heusen, ecommerce share more than doubled to 15% last fiscal and now contributes over Rs 800 crore to overall sales. The online sales of departmental store Pantaloons trebled, while that of Arvind Fashion grew 3.6 times in FY21.

Tata-owned electronics and smartphone retail chain Croma’s ecommerce revenue grew 3.5 times last fiscal as per its regulatory disclosure, while the group’s listed retail entity Trent Ltd said for the first time over 5% of Westside revenue came from online sales last fiscal. The group’s online food and grocery platform StarQuik sales more than doubled to Rs 74 crore in FY21.

“The dichotomy between pure play ecommerce and physical retail is an artificial one since even e-commerce companies have started to go offline. Both will sustain,” consulting firm Third Eyesight’s chief executive Devangshu Dutta said.

Online platforms such as Amazon, Flipkart, JioMart, Grofers and BigBasket scaled up their delivery fleet, hirings and warehouses to meet the increased demand last fiscal. Companies too have expanded their ecommerce range over the past year with some even launching exclusive products.

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Unlike pure play e-commerce platforms which rely on a delivery-based distribution model from their warehouses, retailers fulfill online sales mostly through their stores on a hyperlocal model or some centralized warehouses which too are now connected since last fiscal.



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