E-commerce Holiday Revenues to Hit Rs 90,000 Crore in 2023: Report

e-commerce

The upcoming festive season sales in India’s e-commerce industry in 2023 are projected to achieve a gross merchandise value (GMV) of approximately Rs 90,000 crore, according to a report by Redseer. This figure, covering the entire festive month, represents an 18-20% growth compared to the previous year’s festive month sales, which stood at nearly Rs 76,000 crore. Redseer anticipates that this year’s sales will be driven by roughly 140 million online shoppers who are expected to make transactions during the festive season.

Traditionally, electronics have been the primary driver of festive season purchases. However, Redseer predicts an increasing contribution from higher-margin categories like Beauty and Personal Care (BPC), Home and General Merchandise, and Fashion. The report also suggests that there will be a persistent trend of premiumization, leading to rising Average Selling Prices (ASP). Additionally, increased advertising and promotional revenues are expected to make this year’s festive season the most efficient from a margin perspective.

Mrigank Gutgutia, Partner at Redseer Strategy Consultants, noted the trend of category diversification in festive season sales beyond electronics. Redseer also estimates that Direct-to-Consumer (D2C) brands will grow 1.6 times faster than the broader e-tailing market (CAGR 2022-27).

In terms of city-tier-wise growth, metros have been growing faster than Tier 1 and Tier 2+ cities in recent quarters, with over 10% growth for metros compared to about 8% for other city tiers.

Despite concerns about a consumption slowdown due to high inflation in the economy, Redseer expects the festive season to catalyze online consumption demand following two relatively muted quarters. The e-tailing industry recorded approximately 10% annual GMV growth from January to July 2023 compared to the same period in 2022. Over the past 10 years, India’s e-commerce festive season sales have witnessed substantial growth, with the annual GMV increasing nearly 20 times from Rs 27,000 crore in 2014 to an estimated Rs 5,25,000 crore for 2023, along with a 15x increase in annual transacting users.