India’s upcoming festive season is expected to see buoyant sales as consumers give in to the post-pandemic impulse buying and return to the online markets with a vengeance. An uptick in disposable incomes will also bolster the overall mood to spend, experts believe.
A report from Bangalore-based Red Seer Strategy Consultants estimates online sales in the festive month starting 24 September to touch $11.8 billion, a 28% jump from the pre-pandemic levels of 2018. In fact, in the first week of the festive season itself, sales are projected to reach $5.9 billion.
E-commerce companies have lined up their big online sales starting October, including Amazon Great Indian Festival sale and Flipkart Big Billion Days, to take advantage of the festival shopping.
“Compared to pre-pandemic sales in 2018, the report is projecting a 3x growth in online festive sales GMV (Gross Merchandise Value) this year,” said Red Seer Consultants.
The massive growth in festive sales will further push the overall online retail GMV, which stood at $52 billion in 2021, to grow by 30% to reach $68 billion in 2022, according to the report.
After the festive season sales, the end-of-season sales that usually happen in July or December make for the next best occasion to shop, followed by New Year and traditional New Years ( such as Pongal, Gudi Padwa), Christmas and Eid/ Ramadan.
This time around the festive sales are expected to be boosted by post-pandemic revenge shopping and impulse buys.
“More than a third (35%) agreed with the statement – I am looking forward to Diwali this year since the rest of the year has been quite dull because of Covid-19,” according to the YouGov Festival Survey Report 2022.
Over 27% of respondents of YouGov gave “an increase in gross household income from the past year” as another reason for shopping.
Interestingly, rural India is more pumped up about the approaching festivities but there will be a drop in average spending online, Red Seer Consultants said.
About 48% shop more during the festive season, compared to the rest of the year. A majority of these shoppers are from rural India, reveals Axis My India Sep CSI Survey 2022.
There is an increase in shoppers from Tier 2+ cities (from 42% in 2018 to 60% in 2021) who tend to shop from lower average selling price categories like fashion, home and beauty personal care, reported Red Seer.
“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, Redseer Strategy Consultants.
Urban Indians in north and central India are more excited about shopping around Diwali, followed by residents in West India. Enthusiasm for the festival in South and East India is comparatively lower, reveals YouGov.
Navratri/Durga Pooja is the most anticipated shopping event in East and North-east India as compared to other regions.
“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,” added Kothari.
The launch of new e-commerce models such as live/video commerce is further expected to drive the growth of online shoppers during festivities, estimates Red Seer Consultants. Business Insider