India's evolving e-commerce landscape is driving up festive sales

11 October 2019 2 min. read
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India's festive season has kicked-off on a high, with $1.8 billion worth of sales recorded in the first three days of the season. Online channels are breaking records. 

Past Dussehra and with Diwali around the corner, retailers have kicked off their sales plans for the festive season. According to RedSeer, the online shopping or e-commerce domain – a group the researchers call ‘e-tailers’ – has been dominating sales so far, which have amounted to $1.8 billion in the first three days.

The strong performance has already taken sale numbers past those of the entire festive season in 2017, where total sales amounted to $1.3 billion. Last year, sales had increased considerably, reaching a total of $2.3 billion by the end of the holiday season, while growth this year is expected to exceed 60%.

At the current rate of sales, RedSeer expects sales to reach approximately $3.7 billion by the end of festive season, driven by a variety of factors. Overall increases in economic prosperity and purchasing power is one factor, which is driving a strong consumer market in India.

Festive sales in India

Another factor contributing to overall growth is the rapidly expanding e-commerce domain. India is set to have as many as 850 million online users by 2025. Earlier reports from RedSeer revealed that this new substantial body of internet consumers is not fully utilising internet features, with relatively few ramping up their internet usage to purchasing and commercial activity.

This landscape appears to be evolving rapidly. The authors report that consumer activity online is growing five times faster than the overall consumer market in India, which is already headed towards the $6 trillion mark over the next decade. By 2022, RedSeer expects online consumption to make up 10% of India’s consumer market.

The spread of internet access has also brought about a shift in the demographic contributions to festive sales. The share of smaller cities in the overall sales has increased significantly, which is indicative of more online access as well as the spread of economic prosperity to smaller urban centres.

The management consultants further report that the eating out market in India is seeing remarkable growth. Where the culture of eating out has not gained much momentum in India previously, the advent of online food apps such as Zomato has tremendously boosted food sales.

Earlier this month, RedSeer struck a partnership with global consulting firm OC&C Strategy Consultants.