E-commerce is experiencing robust growth in India’s Tier II and III cities, with Meesho emerging as the fastest-growing platform in the country, according to a research note by brokerage firm Bernstein. The report delves into the user growth dynamics of key players, spotlighting Meesho’s impressive 32% year-on-year increase in its user base, totaling approximately 120 million monthly average users (MAUs).
In contrast, Flipkart, the leader in the e-commerce industry, recorded a 21% YoY growth in its user base in December 2023. Amazon, with a focus on premium offerings, lagged behind with a 13% user growth.
Bernstein emphasized Meesho’s differentiation strategy, providing access to unbranded products at competitive prices to small and medium enterprises (SMEs). The brokerage predicts Meesho to be a key gainer, projecting over 48% of downloads in the Indian e-commerce space and anticipating incremental market share.
The analysis, based on app downloads and engagement trends, extends beyond Meesho to evaluate top picks across various sectors. Zomato takes the spotlight in the food delivery segment, maintaining its lead with increasing monthly active users (MAUs) and deeper penetration into smaller cities compared to competitors.
Zomato’s active user base is outpacing Swiggy, and Bernstein anticipates the foodtech giant to continue securing higher incremental gross merchandise value (GMV) than its counterpart. Zomato commands over 60% of new downloads, underscoring its market dominance.
In the quick commerce sector, Zomato’s Blinkit business leads with an early 40% share, followed by Swiggy’s Instamart at 37-39% and Zepto at approximately 20% share from a GMV perspective.
The analysis also highlights a shift in market share based on MAUs, with Big Basket losing ground to Blinkit and Instamart.
For egrocery players, Blinkit is identified as the fastest-growing, driven by market maturity, an extensive catalog, a wide network of quick commerce peers, and efficient execution. Despite starting operations in April 2021, Zepto lags behind Blinkit in terms of SKUs and reach.
Bernstein attributes Dunzo’s muted growth to capital constraints and a mixed focus on quick commerce and hyperlocal parcel delivery.
In the fashion e-commerce vertical, Nykaa holds a 6% share, while Myntra remains dominant with a 66% share, followed by Reliance’s Ajio at about 30%.
