E-commerce retailers led by Amazon and Flipkart are expected to garner sales worth $11.8 billion this festive season, that’s more than double the pre-pandemic figure of $5 billion in 2019, according to a report by consulting firm Redseer.
Covid-19 has speeded up the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency than last year, said the report, with this year’s numbers projected to increase by 28% to about $9.2 billion from 2021.
The festive month starts from the first sales day and lasts roughly till the Diwali week, and includes non-sales days in the interim. The first week of this festival season itself is expected to garner sales of $5.9 billion, it said.
However, the report showed that the festive season’s share of online retail gross merchandise value (GMV) is dropping, due to increasing frequency of transactions fuelled by sale events throughout the year. GMV is the total value of merchandise sold over a certain time frame. The report shows that the spurt in sales will further push the overall online retail GMV, up 30% from $52 billion in 2021 to reach $68 billion this year.
“We are forecasting a 4x growth in the number of online shoppers from 2018. This has been driven by accelerated digital adoption and increasing penetration in tier-2 cities and beyond,” said Sanjay Kothari, associate partner, Redseer Strategy Consultants. “We expect this expanded customer base to reflect higher sales during the festive period as well.”
The launch of new e-commerce models such as live and video commerce will further drive the growth of online shoppers, especially in tier-II cities and beyond, he added.
Category wise, this festive season, the fashion category will see robust growth driven by an increasing shopper base from Tier II cities. The mobile and electronics category is expected to remain strong during the festive sales driven by better deals and new launches, the report said, adding that participation of online shoppers during the festive week has also doubled from 18% in 2018 to a projected 38% this year.
“This is mainly due to increasing awareness of the festive sales among shoppers, growing reach, targeted selection, and expansion of products within the affordability range for shoppers across city types,” said Kothari.
In the season beginning October and lasting till December, companies will add 20% more to their current workforce base, than last year, according to a report by human resources analytics firm TeamLease. Also, it expects India to have 372 million online shoppers by the end of 2022.
Flipkart’s Big Billion Days sale and Amazon’s Great Indian Festival are scheduled for later this year, to cash in on the festive buying spirit. Myntra, another big retailer, too is gearing up for its ‘Big Fashion Festival’.
India's e-commerce market is expected to reach $120 billion by 2026 from as low of $38 billion in 2021, and according to a joint report published by industry body FICCI and property consultancy Anarock, this exponential rise in retail and e-commerce businesses will fuel the economic growth of the warehousing and logistics sector in the country.