India’s ecommerce sales during the upcoming festive season are likely to grow by nearly a quarter over the previous year to $9 billion, a new report has indicated, underscoring the demand boost that etailers have seen during the pandemic.
For the full year, the overall net gross merchandise value is expected to touch $49-52 billion, or 37% higher than last year’s $38.2 billion, management consultancy RedSeer Consulting has said in 'Ecommerce Festive Season Report'. In the first week of the festive season, online platforms are expected to register 30% year-on-year growth in gross GMV to $4.8 billion.
Gross GMV refers to the total value of goods sold on online before cancellations or returns, if any.
"The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of covid,” said Mrigank Gutgutia, associate partner at RedSeer. “Secondly, Tier-II cities and beyond will continue to drive growth as they are 55-60% of the total shopper base this year, similar or higher than 57% in 2020 festive days.”
On the other hand, as offline retail and mobility recovers to pre-pandemic levels, this willi impact online festive sales as customers may opt for offline shopping as well, he added.
Mobile phones will continue to dominate ecommerce sales, accounting for 11% ($4.8 billion) of Gross GMV in the first week of the festive season sales.
The electronics/appliances category will continue to grow—from 14% share in 2020 to 16% in 2021—driven by ever-expanding selection and reach, and consumers holding back their purchases in anticipation of new launches and attractive pricing.
Affordability constructs, including equated monthly installments (EMIs) and “buy now, pay later” (BNPL), are expected to be a strong growth lever.
Online fashion is also likely to see a steady recovery—in line with greater outdoor mobility of consumers and steady rebound of fashion/office wear.
The report found that sellers are very bullish on this year's sales and are looking to recover losses suffered due to the pandemic. Nearly 80% of the sellers surveyed said festive sales will play a key role in recovery from lockdown-related losses.
"We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption, supported by an increasingly positive macroeconomic and consumption sentiment post the second wave,” said Ujjwal Chaudhry, consulting associate partner at RedSeer.
“At the same time, we see strong bullishness in sellers towards online festive sales as about 80% of them believe that the festive sales will enable them to drive strong sales growth and make up for the losses during the covid period.”
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