Online eTailing festive sales to be around Rs 90,000 crore: Report

In 2014, the eTailing industry clocked a GMV of INR 27,000 crores in the whole year, this year (2023) the same is expected to be approx. INR 5,25,000 crores. In the process, the number of annual transacting users has jumped 15x.

The Indian eTailing has increasingly become the litmus test for consumer demand in India. The 10th festive season sale period is even more significant this year considering the recent slowdown in consumption and the almost 3 years of external shocks on the economy.

Expectation for online festive season 2023: 

Redseer projects the 2023 festive season GMV for (for the entire festive month) for India eTailing to be around INR 90,000 crores, up 18-20% from last year’s festive month sales. This will be driven by about 140 Mn shoppers who are expected to be transacting online at least once during this festive month.

Further, this year’s festive season will see increasing contribution from higher margin categories like Beauty & Personal Care (BPC), Home & General Merchandise, Fashion etc. Also, there will be persistent premiumisation leading to rising Average Selling Prices (ASP) and increasing ads & promotion revenues will possibly make this year’s festive season the most efficient from a margin perspective.

“Over the last several quarters, we are seeing enhanced GMV contributions from categories beyond electronics. While electronics sell a lot in the festive period, looking at the bigger picture and comparing the festive sale periods over the last several years, there is a clear trend of category diversification. This is good for the ecosystem as it shows consumers’ willingness to purchase multiple categories online and more brands coming to cater to their needs. Continuing with this trend, we expect increasing GMV contributions from non-electronics categories like Fashion, BPC, Home & General Merchandise and more this festive period”, said Mrigank Gutgutia, Partner at Redseer Strategy Consultants.

Beyond category diversification, Redseer expects multiple other sub-themes to play out. For example, D2C brands being more prominent this festive season. Projecting these to the long term, we expect D2C brands to grow 1.6x as fast as the broader eTailing market (CAGR 2022-27).

In terms of city-tier wise growth, metros have been growing faster than the Tier 1 and Tier 2+ in the last few quarters (10%+ for metros vs ~8% for other city tiers. However, robust growth is expected across city tiers this festive season.

Additionally, new-age technology solutions like generative AI being more widely adopted in multiple use-cases during the sale period will also lead to better and novel consumer experiences and drive stronger growth momentum.