Online retail in India to see a sharp growth this festive season
Online retail in India has seen a sharp growth in the last few months and will continue to show an upward trend with the festive season around the corner.
According to forecast data from Forrester, “year-over-year growth in online retail spending during the festive month will see a growth of 34%.”
Growth story
After months of flat growth, the festive season may just bring the much-needed cheer. Online retailers in India are expected to generate approximately US$6.5 billion in sales during this year’s festive month (15 Oct to 15 Nov), with around 55–60 million online buyers participating, according to the forecast.
Changed buyer behaviour
- The pandemic has brought about a fundamental change in the buying behaviour, and expedited the consumer shift from offline to online, in a big way.
- With many offices moving to work-from-home options leading to the large-scale migration of employees to smaller cities, there is a likely increase in the share of purchase from tier 2 and 3 cities, as per the report.
The category play
Some categories that are likely to see disproportionate traction during the festive month include consumer electronics, home appliances, smartphones, and home furnishing, according to the forecast.
- Smartphone remains the largest category and grocery the fastest growing. As per the report, smartphones and consumer electronics will grow at 26% and 43%, respectively.
- The growth in grocery as the fastest-growing category marks a paradigm shift with far-reaching implications. The growth is marked by most of the festive-themed categories within grocery moving online, aided by the increase in basket size during the festive period.
- The third-largest category – fashion is expected to contract by 9% this festive season compared to last year and the reason is obvious. With consumers not having much of mobility, occasion-based clothing shopping will remain subdued this season, points out the report.
Festive special
- To make the most of this season, marketplaces are gearing up for a festival bonanza. Satish Meena, senior forecast analyst, Forrester India said, “e-tailers will be actively addressing increased online demand on multiple fronts, making big investments to ramp up infrastructure, workforces, and technology across lower-tier cities and metropolitan areas to drive overall fulfillment.”
- During the festive-year period, online players are likely to offer attractive festive deals and product discounting along with flexible payment options to boost affordability for consumers, added Meena.