Sustained recovery or false start?
The industry continues its slow and steady recovery in 2017: With an average GMV run rate at USD 14 Bn in Jan/Feb 2017, 5% higher vs slump period of H1-2016, the industry seems to be on the (slow) path to recovery.
Smartphones are the architect of the recovery: Smartphones accounted for 53% of industry GMV in Jan/Feb 2017, higher than 49% share seen during most of the CY2016. The regular launch of exclusives continues to whet the Indian consumer’s seemingly insatiable appetite for smartphones, thus driving the market.
However, a smartphone-driven recovery may not be very sustainable in longer term: Even as smartphone dependence increased, GMV share of high volume, high repeat categories like fashion and FMCG continues to remain flat in 2017, at 22% and ~3%. Lack of growth in such categories may point to deeper problems in onboarding new customers and thus create a sustainably growing GMV base.