E-commerce sales: Tier-3 cities emerge key growth drivers
Credit: iStock photo
Bengaluru: The e-commerce market in India is no longer limited to Tier-1 cities and discount-driven spikes.
Tier-3 cities have now emerged as key growth drivers. Smaller cities led by Kolar, Rohtak (Haryana), Kamrup (Assam), Ernakulam (Kerala), and Khordha (Odisha) among others accounted for nearly 40 per cent of total order items, with order volumes growing over 19 per cent year-on-year.
According to an analysis by Unicommerce based on 27 million order items processed during the Republic Day sales 2026, healthy food volumes more than doubled in Tier-2 cities, while Tier-3 markets contributed around 43% of total food and beverage orders, underscoring the deepening reach of e-commerce beyond metros.
Order volumes grew 16.9 per cent Year-on-year, while gross merchandise volume (GMV) rose 11.9 per cent driven by higher order frequency rather than ticket size alone. FMCG & agriculture and beauty & wellness were the fastest-growing categories, with nearly 80 per cent and 53 per cent YoY growth respectively.
Demand was led by healthy and everyday items such as dry fruits, millet-based products, packaged healthy snacks, and organic staples, and face serums, body washes along with other grooming products - reflecting a shift towards habit-driven, repeat consumption.
Channel trends highlighted rising expectations for faster fulfillment. Quick commerce led growth with a ~25% YoY increase in order volumes, followed by brand-owned websites at 23%, while marketplaces continued to process the largest share of orders. Brands increasingly relied on automation to manage real-time inventory, routing, and customer engagement, reinforcing that execution quality is now as critical as pricing in driving sales performance.
Brands leveraged AI and automation to convert high-intent demand during the Republic Day sale period this year. Insights from Unicommerce’s Convertway platform show over 2.5 million customer communications across SMS, WhatsApp, and RCS, driving improvement in conversion rates. AI Voice Agent ‘Catalyst’ further enabled last-mile order completion, with over 1.2 lakh calls made during the sales period—generating over ten times revenue for brands compared to the cost they incurred, making it a high-yield channel and highlighting the growing role of AI in shaping sale outcomes.
Repeat consumption, execution and technology-led expansion, smaller-city participation, faster fulfillment, and AI engagement have emerged as the key growth levers in 2026, the Unicommerce study shows.
Unicommerce serves over 7,500 clients across India, Southeast Asia, and the Middle East. Some of its marquee clients include FabIndia, Lenskart, Timex, TCNS, Mamaearth, Sugar, Emami, Urban Company, Cello, Symphony, Healthkart, GNC, boAt, Portronics, TMRW, Mensa, Landmark Group and many more.