The festive season sale sparked a much-needed surge in online shopping following a subdued start to the year in the first half. E-commerce companies and online brands reported a steady uptick in sales, with categories like electronics, food, grocery, and jewellery witnessing double-digit growth over last year.
Despite offline retail operating at full capacity, statistics from consulting firm Grant Thornton Bharat suggest that over 50% of total festive sales were generated through online platforms, compared to 45% in 2022.
Unicommerce, a platform assisting businesses in online sales, reported a 37% increase in e-commerce order volumes during this year’s festive season sale compared to 2022. In the realm of gross merchandise value (GMV), online retail witnessed a growth of 22%.
Reports from the industry suggest that the gross merchandise value (GMV) for the festive month is approximately in the range of $10-11 billion. A substantial portion of the increased value is attributed to the sale of high-value items, particularly in large categories such as smartphones and appliances. This growth was facilitated by financing options offered through marketplaces and partnering lending institutions.
GMV represents the total sales generated by merchants on an e-commerce platform, excluding discounts. The e-tailer earns a margin of 5-20%, depending on the category, which constitutes its revenue.
“This year, ecommerce is expected to account for more than 50% of all festive sales in India, up from 45% in 2022,” said Naveen Malpani, partner, Grant Thornton Bharat. “Online sales are expected to grow at 18-20% over the festive month of 2022 driven by around 140 million online shoppers making purchases during this period.”
Digital payment firms mirrored the sales patterns, with transactions witnessing an almost 50% year-on-year growth. Specific segments, including food and grocery, consumer durables, and jewelry, contributed significantly to this increase.
Started on October 8 this year, the festive season sales featured smaller sale events leading up to flagship occasions like Flipkart’s Big Billion Days and Amazon’s Great Indian Festival.
Information from the National Payments Corporation of India, the entity overseeing Unified Payments Interface, revealed a 71% surge in merchant transactions during September and October, totaling over 12 billion transactions. This represents an increase of approximately 7 billion compared to the corresponding period last year.
Most sellers and brands note that a substantial portion of the sales occurred within the initial two to three weeks of the festive season. Ganesh Sonawane, co-founder of the ergonomic accessories maker Frido, mentioned that sales remained robust until October 18, after which it returned to a more typical business pattern.
“First flagship sale and the last sale event usually drive most of the sales and that’s played out this year too. In this cycle, we have seen premium products doing better than relatively cheaper ones,” said an ecommerce merchant who sells across Flipkart, Amazon and other platforms.
The direct-to-consumer fitness brand Boldfit experienced a twofold increase in sales during this year’s festive months compared to the previous year. However, there were reports of ‘purchase fatigue’ among consumers starting from the third week of October.
Online shopping has become more enticing this year due to affordable credit, EMI offers, and deep discounts. Offline shopping has also demonstrated robust growth, although industry executives have noted that certain sectors have not performed as well.
“Electronics and jewellery grew by about 10% over last year, but lifestyle buying was muted, even showing degrowth,” said Rajeev Agrawal, chief executive officer, Innoviti Payments, which offers payment solutions to large organised retail stores.
Average ticket size of transactions went up, showing that the rich generally bought more premium products. Agrawal said that this year the average ticket size of transactions in the food and grocery category was up 14%, lifestyle was up 9%, electronics 8% and jewellery 4%.
“Similar to what we witnessed during the Big Billion Days this year, choices in smartphones, laptops, tablets and home appliances indicate a strong premiumisation trend pan-India,” said Arief Mohamad, vice president – customer growth and loyalty, Flipkart
Tier two and three locations showed promising growth for online sellers this year.
Amazon said 80% of their customers who shopped during these months came from smaller towns. Overall, 40 lakh new customers bought from Amazon this year, the company said. It also saw over 65% of its Prime membership holders who shopped in the festive period come from tier two and three towns.
Malpani of Grant Thornton Bharat said that smaller cities contributed to 80% of all festive sales on e-commerce platforms, up from 75% last year.
“The ecommerce platforms have made a concerted effort of regional language support, localised product assortments etc. to reach and serve consumers in these cities,” he said.
