Ecommerce Sector Sees 27% Rise in Festive Season Sales, Expected to Reach Rs 1.2 Lakh Crore

Ecommerce in India is expected to see a 27% rise in sales during the festive season, reaching Rs 1.2 lakh crore. Grocery, appliances, and personal care are key drivers, while mobiles and lifestyle may see a decline. Quick-commerce startups like Blinkit, Swiggy Instamart, Zepto, and BigBasket's BB Now are gearing up for the Diwali season. Consumer sentiment in urban India turned positive in July for the first time in three years.

Indian e-commerce marketplaces and online retailers are gearing up for a record-breaking festive season, with projected sales of Rs 1.2 lakh crore, marking a 27% increase from last year [2]. This surge comes on the back of a positive turn in consumer sentiment in urban India, which has been slow for the past three years [2].

The key drivers for this growth are expected to be grocery, appliances, and personal care categories. However, mobile and lifestyle sales are likely to see a decline in their share of gross merchandise value (GMV) due to overall market slowdown [2]. Quick-commerce startups like Blinkit, Swiggy Instamart, Zepto, and BigBasket's BB Now are particularly preparing for the Diwali season, aiming to capitalize on the expected demand surge [2].

The festive season, which typically accounts for 30-40% of annual sales for categories like apparel and electronics, is critical for e-commerce platforms and retailers this year. Sales have been weak for the past few quarters, and the early onset of monsoons and floods in several states also contributed to slower sales during the summer [2].

To prepare for the festive season, e-commerce giants like Amazon India and Flipkart are expanding their supply chain and last-mile delivery infrastructure. Amazon has opened a dozen new fulfillment centers across major cities, adding more than 8.6 million cubic feet of storage capacity [2]. Flipkart, on the other hand, has significantly expanded its supply chain and logistics network, generating 220,000 additional seasonal job opportunities [2].

Quick-commerce firms are also ramping up their preparations. For instance, Swiggy's quick-commerce arm, Instamart, is stocking its dark stores and expanding its workforce and delivery fleet. Similarly, BigBasket expects a 50% revenue increase this festive season, having already recorded 2.5x growth over last year [2].

The Goods and Services Tax (GST) Council is expected to finalize the Centre's proposal to consolidate the GST structure into two rates—5% and 18%—by the end of September. A higher levy of 40% GST could be levied on sin products like alcohol, tobacco, and some luxury goods [2].

The festive season, which is already underway with Onam and Ganesh Chaturthi, will conclude with Diwali in October. The Datum Intelligence report indicates that consumer sentiment in urban India turned positive in July for the first time in three years [2].

References:
[1] https://economictimes.indiatimes.com/tech/funding/d2c-grocery-startup-anmasa-raises-1-1-million-in-pre-seed-funding/articleshow/123528002.cms
[2] https://m.economictimes.com/tech/technology/festive-season-expected-to-see-shipments-by-ecommerce-companies-online-sellers-surge-27-to-rs-1-2-lakh-crore-report/articleshow/123556909.cms