As the festive season approaches, e-commerce in India is poised for remarkable growth, with a projected $12 billion in sales expected this year. This figure represents a 23% increase from last year’s gross merchandise value (GMV) of approximately $9.7 billion, according to Datum Intelligence. Among the highlights of the upcoming season is quick commerce, which may account for about $1 billion of these sales.
During this period, typically lasting around two months leading up to Diwali, e-commerce platforms, their sellers, and major brands prepare for a surge in consumer spending, marking this time as critical for revenue generation. With growing online shopping trends, including shifted consumer behavior and technological advancements, companies are eager to capitalize on this unique shopping season.
Quick commerce, a segment particularly striking this year, encompasses platforms like Blinkit (owned by Zomato), Swiggy Instamart, Zepto, and BigBasket’s BB Now. As observed in recent trends, quick commerce is dominating the market, focusing primarily on groceries and beauty products. According to Satish Meena, an advisor at Datum Intelligence, this trend indicates that these platforms will significantly disrupt traditional retail, including kirana stores.
Strategy is key for quick commerce; Zepto indicates it has expanded its product offerings to include items such as electrical appliances and beauty products to capture the festive demand. Consumers can expect tailored festival-specific offers as the platform aligns with brands to ensure readiness for increased demand.
Categories like smartphones and large appliances typically generate substantial revenue during the festive season, making them critical for e-commerce platforms. The Datum Intelligence report indicates that mobile and fashion categories may account for up to 50% of total festive sales this year. This year, the trend of premiumization is expected to gather momentum, building on last year’s shift in consumer preferences towards higher-end products, especially in the smartphone sector.
Prominent e-commerce players, such as Amazon India and Walmart-owned Flipkart, are set to launch their annual festive sales on September 27, with promotional activities extending over several weeks. Meanwhile, Meesho will introduce its Mega Blockbuster Sale on the same day, while Flipkart’s Myntra plans to kick off its Big Fashion Festival a day earlier.
Innovative features and enhanced customer experiences will play a critical role during the sales. According to Harsh Chaudhary, head of growth at Flipkart, customers can look forward to immersive technologies, including augmented reality (AR) and 3D try-ons, facilitating a more interactive shopping experience.
The evolving nature of consumer behavior has led to shoppers in smaller cities starting their festive purchases earlier than before, aiming to secure prompt delivery of products amid the traditional delivery delays typically experienced during high-demand periods. Flipkart has responded by establishing 11 new fulfillment centers and creating over 100,000 temporary jobs across various regions. Simultaneously, Amazon has launched new fulfillment centers in the National Capital Region, Guwahati, and Patna to bolster its delivery capabilities.
As the millennial demographic continues to influence shopping trends, brands are closely monitoring changing preferences. For instance, Meesho’s spokesperson highlights that millennials constitute approximately 60% of their shopper base, favoring categories such as fashion, home goods, kitchenware, and beauty products. This insight is valuable for companies strategizing their marketing and inventory for the upcoming season.
E-commerce is not only a channel for clothing and electronics but also a critical sales avenue for products like furniture and home goods. Brands, like Wakefit, expect a significant uptick in demand, anticipating sales on peak shopping days reaching tenfold compared to usual levels. However, some categories, such as large items, remain resistant to the quick commerce model due to logistical challenges inherent in delivering bulky products.
In summary, the festive season in 2024 heralds significant growth opportunities for e-commerce companies in India, driven by omnichannel strategies and a highly engaged consumer base. Businesses are responding to shifting consumer demands and leveraging advanced technologies to enhance the customer experience. As the sector adapts to the swift changes in shopping behaviors, partnerships throughout the supply chain become essential in meeting the heightened expectations of the holiday shopper.
