India’s e-commerce companies are likely to see a 28% on-year increase in sales to $11.8 billion during the festive month with a spurt in fashion category, according to a report, while bellwethers such as Amazon and Flipkart have already initiated steps to prepare for the upcoming season sale.
Strategy consulting firm Redseer expects sales are estimated to reach $5.9 billion in the first week itself, projecting a 28% increase %4.8 billion last year.
The growth is expected to be driven by the doubling of online shoppers during the festive season as against 2018, Redseer said in a report.
Media reported earlier yesterday that several brands, sellers, and ecommerce executives expect a noteworthy change in consumer sentiments potentially resulting in 30-40% higher sales during the Diwali sales this year compared to last year. This comes on the back of relatively muted sales clocked by these online retailer players due to inflationary pressures as well as offline stores opening up fully with Covid cases falling.
The festive month is usually defined as a period starting from the first sales event and lasting roughly till the Diwali week, including non-sale or business-as-usual days in between, according to Redseer.
The category mix has been evolving differently in pre-festive months which will impact festive category mix as well, Redseer said.
The fashion category is likely to see robust growth, driven by an increasing shopper base from Tier 2+ cities and first-time shoppers who generally tend to begin their online shopping journey with fashion. There will also be an increasing participation of fashion-led players in the festive sales this year, Redseer said.
The mobile and electronics category is expected to remain strong during the period driven by better deals and new launches, it added.
“We are forecasting 4x growth in the number of online shoppers from 2018. This growth has been driven by accelerated digital adoption and increasing penetration in Tier 2+ cities…We expect this expanded customer base to reflect in higher sales during the festive sales period as well,” said Sanjay Kothari, associate partner at Redseer Strategy Consultants.
“The doubling of online shoppers during the festive season is majorly due to increasing awareness of the festive sales among the shoppers, growing reach, targeted selection, and expansion of products within the affordability range for shoppers across city types,” he added.
The launch of new e-commerce models such as live/video commerce will further drive the growth of online shoppers during the festive period.
The massive growth in festive sales will further push the overall online retail GMV (Gross Merchandise Value), which stood at $52 billion in 2021, to jump by 30% to reach $68 billion in 2022, Redseer said in the report.
The festive season would be critical for the ecommerce players like Flipkart and Amazon, both of which had an intense fight last year with last-minute changes to festive dates to outsmart each other. The retailer can change festive sales dates at the last minute.