Online sales during festive months is going to reach $11.8 billion, a 28% increase from last year, as per the latest report from Redseer Strategy Consultants.
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.
As per the forecast by Redseer, in the first week itself, the sales are estimated to reach $5.9 billion, projecting a 28% 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,” said Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.
Reasons for growth
The participation of online shoppers during the festive week has also doubled from 18% in CY18 to a projected 38% 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,” added 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, as per the report.
Category mix has been evolving differently in pre-festive months which will impact festive category mix as well. The report says that 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% to reach $68 billion in 2022, according to the report by Redseer Strategy Consultants.
For comparison across the years, the report considers the exchange rate of Rs 70 per dollar.