As the festive season is set to kickstart across the country, the latest report from Redseer Strategy Consultants forecasts the online sales during festive month to reach $11.8 billion, a 28 percent increase from last year.
The festive month is generally defined as a period starting from the first sales event and lasting roughly till Diwali week, including non-sale or business-as-usual days in between. In the first week itself, the sales are estimated to reach $5.9 billion, projecting a 28 percent increase from last year, when they stood at $4.8 billion. Compared to pre-pandemic sales in 2018, the report is projecting a ~3x growth in online festive sales GMV this year.
“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,” says Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.
Redseer Strategy Consultants is a leading strategy consulting firm. Founded in 2009, Redseer works with new-age consumer-focused businesses and offers growth advisory, digital strategy, and investment thesis. The company is a thought leader in the Internet economy space and is the most widely quoted consulting firm in the media. The company boasts a 90% + market share of new-age IPOs.
Reasons for growth Participation of online shoppers during the festive week has also doubled from 18 percent in CY18 to a projected 38 percent in CY22. i.e, out of total online shoppers, those who shop during festive sales have doubled from 2018. “This 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”, adds Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.
In addition, the launch of new e-commerce models such as live/video commerce will further drive the growth of online shoppers during the festive period.
Category mix has been evolving differently in pre-festive months which will impact festive category mix as well. This year, the fashion category will 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.
The mobile and electronics category is expected to remain strong during the festive sales driven by better deals and new launches. 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 grow by 30 percent to reach $68 billion in 2022, quotes the report by Redseer Strategy Consultants.