E-commerce companies in India are expected to sell products worth USD 9 billion during the upcoming festive month—from the first week of October until Diwali in early November, said a report by Bengaluru-based consulting firm RedSeer on Thursday.
The total monetary value of products sold through online channels—also known as the gross merchandise value (GMV)—during the festive month in 2021 will grow by 23% over the same period last year when the online commerce platforms clocked a GMV of USD 7.4 billion. Of this, major sales are likely to occur in the first week of the festive season sales—between October 6 and October 12—during which e-commerce firms are projected to cross the GMV of USD 4.8 billion, 30% more than the previous year.
The growth comes on the back of the COVID-19 pandemic, which accelerated online adoption among millions of Indian consumers. Nearly 70 million people are expected to shop online during the first week of festive sales, which is when Flipkart will be holding its annual mega sale—Big Billion Days. Its arch-rival Amazon will be holding a competing annual sales event—Great Indian Festival—in October, although the company hasn’t disclosed the dates yet.
The average consumer spending will hover around USD 74, up from USD 50 last year, the report said. Notably, smaller towns—beyond metros and tier 1 cities—will contribute to the major growth, as they account for 55–60% of the total shoppers this year, just as they made up 57% user base in the 2020 festive days.
“We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the COVID-19 second wave has passed,” said Mrigank Gutgutia, associate partner at RedSeer.
At the same time, he added, local sellers remain bullish on this year’s online festive sales, with 80% of them believing that the festive sales will drive strong sales growth and make up for the losses during the pandemic.
During the first week of festive sales, RedSeer expects the mobile category to dominate festive sales, driven by new launches, contributing 45% to the USD 4.8 billion GMV. Electronics is likely to see the second-highest demand with the availability of a wide range of selection and easy payment options like EMIs and “buy now, pay later.” This sector will account for 28% of the festive week’s GMV, followed by the fashion segment, which will make up 16% of the GMV.
However, with offline retail and mobility recovering almost up to pre-COVID-19 levels, the report said online festive sales may be impacted as customers opt for shopping offline—something they couldn’t do very much of over the past year and a half.
Overall, the online GMV in 2021 is expected to reach USD 49–52 billion, according to RedSeer, up 37% from last year, primarily due to “consumer funnel expansion” and the “high adoption of online shopping post-COVID-19 across the categories.”
“We expect that the festive season to be the icing on the cake for the e-tailing sector in 2021, which has been buoyed by a fast-growing customer (and seller) base throughout the year,” the report noted.
