Books were the dominant category in the very early days of Indian e-commerce (given the standardised nature of the product), electronics quickly became the top category for most horizontal e-commerce companies. This was also a category that had standardised products which made it easier for consumers to buy online, and price discounts were significant incentives given easy price comons across different channels. As Indian e-commerce started becoming larger, other categories started growing, especially apparel and other fashion products (including personal care). The growth of vertically focused companies drove growth in other categories as well.
E-commerce companies have also started reducing their focus somewhat on electronics given the difficulty in making money in that category. Price comons are easy and competition is intense. On the other hand, apparel, especially private labels, can have high
margins.
Margins to Indian Ecommerce Retailers for Selling Branded / UnBranded Items
Unbranded apparel and other fashion accessories, too, have higher margins relative to traditional electronics products. The average commission rate charged by Flipkart and Amazon India is ~15% for apparel, about 11% for other fashion products (although lower for health and beauty products) and high single digits on home furnishings.
These are the faster growing categories for the Indian e-commerce firms and in the past 12 months, there has been increasing focus to increase the share of such products in the overall GMV mix.
