As 2023 marks the 10th year of Indian e-commerce festive season sales, this year’s festive season GMV (for the entire festive month) is projected to be around ₹90,000 crore, up 18–20 per cent from last year’s festive month sales, according to Redseer Strategy Consultants.
The sale will be driven by about 140 million shoppers, who are expected to transact online at least once during this festive month.
The first ever Indian e-tail festive season sales took place in 2014. Over these 10 years, Indian e-tailing has transformed almost entirely, as the annual GMV for the overall e-tailing industry has grown almost 20 times in the period.
In 2014, the industry clocked a GMV of ₹27,000 crore in the whole year; this year (2023), the same is expected to be about ₹5,25,000 crore. Moreover, in the process, the number of annual transacting users has jumped by 15 times.
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Furthermore, this year’s holiday season will see increasing contributions from higher margin categories like beauty and personal care (BPC), home and general merchandise, fashion, and more. Additionally, there will be persistent premiumisation, leading to rising average selling prices (ASP), and increasing ad and promotion revenues will possibly make this year’s holiday season the most efficient from a margin perspective.
Category diversification
“Over the last several quarters, we have seen enhanced GMV contributions from categories beyond electronics. While electronics sell a lot in the festive period, comparing the festive sale periods over the last several years, there is a clear trend of category diversification,” said Mrigank Gutgutia, Partner at Redseer Strategy Consultants.
Beyond category diversification, we expect multiple other sub-themes to play out, such as D2C brands being more prominent this holiday season. “Projecting these to the long-term, we expect D2C brands to grow 1.6x as fast as the broader e-tail market (CAGR 2022-27),” he added.
In terms of city-tier wise growth, metros have been growing faster than Tier 1 and Tier 2+ in the last few quarters (10 per cent for metros compared to 8 per cent for other city tiers). However, the report estimates significant growth across city tiers this holiday season.
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Additionally, new-age technology solutions such as generative AI will be deployed widely this season, leading to to better and more novel consumer experiences and strong growth momentum.
Indian e-commerce has increasingly become the litmus test for consumer demand in India. According to the report, pre-Covid, the y-o-y growth rates of nominal private final consumption expenditure (PFCE) was in the range of 8–9 per cent. However, due to continuous external shocks such as Covid-19 and the Russia-Ukraine conflict, there has been a significant flux in the market.