Ecommerce revenue to jump during India's 2023 festive season
Online retail sales during India’s festive month is expected to be up to 20% higher compared to last year, offering promising prospects for e-commerce retailers and consumers alike. That is according to a report from consulting firm Redseer that delves into the ever-evolving Indian e-commerce landscape.
India’s festive season is considered to start around early September with Ganesh Chaturthi and extends through to November with Diwali, the spiritual festival of lights. This entire period is significant for retail and e-commerce in the Hindu parts of India (about 80% of the country).
During this time, major celebrations and gift-giving take place, prompting increased shopping activities. Retailers often offer special discounts and promotions to capitalize on the heightened consumer demand during these festive months, not unlike the mostly Christmas-fueled shopping boost in the West from November to December.
The growth in India festive sales season is anticipated to be fueled by the engagement of roughly 140 million shoppers, all of whom are expected to make at least one online transaction during the period.
The upcoming festive season is expected to see a notable increase in the share of higher-margin segments like beauty and personal care, home and general merchandise, and fashion.
The role of mobiles and electronics, which generally yield lower margins, is steadily diminishing according to Redseer. The share of these products are gradually being replaced by more lucrative categories like home, beauty and personal care, and fashion.
This shift towards premium categories is driving an upward trend in average selling prices and is expected to boost advertising and promotional revenues, potentially making this year’s festive season the most cost-effective in terms of margins.
Redseer also noted that competition in these segments is on the rise, as corporates, e-commerce players and platform build further maturity and close substantial acquisitions, thereby intensifying competition within these categories.
The Indian festive season sales made its debut in 2014, and this year marks the 10th anniversary of this annual event. It has largely been seen as a major success, with events like the ‘Big Billion Days’ and ‘The Great Indian Festival’ greatly boosting revenue for both brick-and-mortars and ecommerce alike.
Over the past decade, there has been a profound transformation in the landscape of Indian e-tailing, with the overall gross merchandises value of the e-tailing industry having grown nearly twentyfold. Consequently, the number of yearly transacting users has also increased by fifteen.
An increase in domestic demand and spending is certainly welcome in India, where the export markets have been slowing down. A slight relaxation in inflation and a weak festive season last year are both indicators that this year will indeed see more joy and celebration for businesses in this special time of year.
