A report from Redseer Strategy Consultants anticipates that approximately 140 million online shoppers will participate in at least one online transaction this festive season, fueling an 18-20% surge in sales compared to the previous year
The festive season in India acts as a pivotal catalyst for robust online sales and heightened e-commerce engagement. Notably, prominent e-commerce platforms such as Amazon, Flipkart, and Myntra have already witnessed a substantial surge in online sales during the early stages, with expectations of even more impressive performance throughout the month-long festive season leading up to Diwali. The possibility of establishing new sales records further heightens the anticipation. In 2014, India embraced its first eTailing festive season sales, making this year’s sales a celebration of the 10th anniversary of this cherished tradition.
As per a Deloitte report, the projection for online retail penetration presents a compelling narrative, set to outstrip its offline counterpart by a substantial factor of 2.5 in the upcoming decade. The sector, which commanded a valuation of US$70 billion in 2022, is forecasted to embark on an astonishing journey, ultimately reaching a staggering US$325 billion by the year 2030, as per the report. These projections, as outlined in the report, can be largely attributed to the exponential growth of e-commerce within tier-2 and tier-3 cities, where the total volume of orders has notably eclipsed that of tier-1 markets.
A report by Redseer Strategy Consultants predicts that during this festive season, e-commerce retailers are poised to achieve sales of approximately Rs 90,000 crore, marking an 18 to 20 percent increase compared to the previous year. This surge is anticipated to be fueled by an estimated 140 million online shoppers who are expected to engage in at least one online transaction during this festive month.
The festive season online sales spike in India can be attributed to the confluence of cultural celebrations, enticing discounts, a wide variety of products, the convenience and safety of online shopping, and the tradition of gifting, creating a dynamic market environment that propels e-commerce to the forefront of consumer activity.
Here’s how the festive season boosts online sales in India:
Attractive Discounts and Offers: E-commerce platforms and retailers offer attractive discounts, deals, and special festive offers to attract customers. These special offers further encourage consumers to make purchases online, leading to higher sales volumes. Many e-commerce platforms offer cashback and rewards programmes that incentivise repeat purchases. Shoppers are often enticed by the prospect of earning rewards or getting cashback on their festival-related purchases.
Increased Consumer Spending: During the festive season, there is a surge in consumer spending as people purchase new clothes, gifts, home decor, electronics, and more. This increased spending extends to online shopping, with customers looking for convenience, variety, and competitive pricing.
Deeper penetration of Smartphones and Internet: The increasing penetration of smartphones and the internet in India, especially in Tier-2 and tier-3 cities, has made online shopping more accessible to a larger segment of the population. This has expanded the customer base for e-commerce during festive seasons.
Shopping convenience: Online shopping offers convenience, especially for those who prefer to avoid crowded physical stores. Shoppers can seamlessly explore a vast selection of products, compare prices, and complete transactions from the comfort of their own homes. Furthermore, the widespread adoption of advanced technologies like AI and VR to create immersive shopping experiences during the sales season is expected to enhance consumer satisfaction, leading to higher online sales.
Gifting tradition: Gifting is an integral part of the festive season, and online retailers often provide gift-wrapping and delivery services, making it easier for people to send gifts to their loved ones, even if they are far away. E-gift cards and vouchers are popular choices for gifting, and online platforms make it easy for customers to purchase and redeem them.
Price comparison and exclusive launches: Online marketplaces, aggregators, and price comparison websites help consumers find the best deals and discounts across various e-commerce platforms, contributing to increased online sales. Retailers often launch exclusive products and collections during the festive season, creating a sense of urgency and novelty that drives online sales.
Digital Payment Options: The availability of various digital payment options, such as mobile wallets, credit/debit cards, and UPI (Unified Payments Interface), makes online transactions more convenient and secure.
Marketing and Advertising Campaigns: E-commerce companies invest heavily in marketing and advertising during festive seasons. This not only promotes their platforms but also creates a sense of anticipation and excitement among consumers, driving them to shop online.
The festive season is a win-win situation for both consumers and e-commerce companies, as shoppers benefit from a wide array of choices, competitive pricing, and convenience, while e-commerce platforms see a significant boost in their sales and revenue during this time. Moreover, experts feel that the future of India’s retail sector looks promising, driven by the upward trend in incomes, the expanding middle-class demographic, and the rapid shift towards digital commerce.
(Edited by Tanmoy Mitra)
