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E-commerce retailers led by Amazon and Flipkart are expected to garner sales worth $11.8 billion this festive season, comfortably more than double the pre-pandemic figure of $5 billion in 2019, according to a report by consulting firm Redseer.
Covid-19 has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency than last year, analysts say.
This year’s numbers are projected to increase by 28 per cent from 2021, which saw festive season sales of about $9.2 billion.
The spurt in sales will further push the overall online retail gross merchandise value (GMV), up 30 per cent from $52 billion in 2021 to reach $68 billion this year.
“We are forecasting 4x growth in the number of online shoppers from 2018. This has been driven by accelerated digital adoption and increasing penetration in tier-2 cities and beyond,” said Sanjay Kothari, associate partner, Redseer Strategy Consultants. “We expect this expanded customer base to reflect higher sales during the festive period as well.”
The festive month starts from the first sales day and lasts roughly till the Diwali week, and includes non-sales days in the interim. This year, the first week itself is expected to register sales worth $5.9 billion, a 28 per cent increase from last year ($4.8 billion). Compared to 2018, the Redseer report is projecting a 3x growth in online festive sales GMV this year.
Participation of online shoppers during the festive week has also doubled from 18 per cent in CY18 to a projected 38 per cent in CY22.
“This is mainly due to increasing awareness of the festive sales among shoppers, growing reach, targeted selection, and expansion of products within the affordability range for shoppers across city types,” said Kothari.
The launch of new e-commerce models such as live and video commerce will further drive the growth of online shoppers, especially in tier-II cities and beyond.
India’s e-commerce spending is expected to grow twofold to $130 billion-plus in GMV by 2025, with online shoppers projected to increase to 300 million, according to a report by US-based research group Bernstein. Growth is expected to be led by new online shoppers, primarily from tier II/III cities.
According to Bernstein estimates, Walmart-owned Flipkart leads the Indian e-commerce market with annual sales of $23 billion in 2021. Amazon is the second-biggest player with $18-20 billion of GMV last year. Reliance comes next with sales of around $4.6 billion. Bernstein said Amazon’s growth in India has come at a high cost of over $6.5 billion-plus invested to date.
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