Key Points: 

    • 2023 marks the 10th year of Indian eCommerce festive season sales
    • Over these 10 years, Indian eCommerce GMV has grown ~20x with a ~15x jump in Annual Transacting Userbase
    • We project 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.
    • 2023 online festive sales will catalyze consumption demand as the economy emerges from the turbulence of the last 3 years
    • This festive season can potentially be the most efficient one ever in terms of margins, with evolving category mix and higher ads & promotion revenues.


Bengaluru, 15 Sep 2023

India e-tailing market macro context: The first ever Indian eTailing festive season sales happened in 2014. Hence, this year’s sales is the 10th year of the festive season sales. Over these 10 years, Indian eTailing has transformed almost entirely as the annual GMV for overall e-tailing industry has grown almost 20 times in the period. That is, while in 2014, the 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.

Wider macro context: Pre-COVID, the YOY growth rates of nominal Private Final Consumption Expenditure (PFCE) used to be around 8-9%. However, due to continuous external shocks like COVID- 19 and Russia-Ukraine conflict, there was significant flux in the market. And in the last couple of quarters of FY23, there was material consumption slowdown due to tightening liquidity conditions.

However, the YOY growth for PFCE has bounced back to 9% and several stabilizing factors are kicking- in. For instance, interest rates are maxing out, countries aiming to resolve the Russia Ukraine conflict, and the Indian economic growth numbers are coming in strong. So, there are meaningful tailwinds to support a relatively strong festive period this year.

How has India e-tailing performed in the calendar year so far: In this macro context, there was significant flux in eTailing sales as well. While growth was strong after COVID, the last 2+ quarters have been relatively muted. The e-tailing industry recorded approx. 10% YOY GMV growth (Jan – Jul 2023 vs Jan-Jul 2022). However, with the broader economy coming back to business-as-usual levels, this festive season is likely to catalyze online consumption demand.

What is our expectation for online festive season 2023: We project 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 is 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. his 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, we expect 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, we expect robust growth 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.