Festive sales are expected to almost double this year and touch US$ 7 billion in gross merchandise value (GMV) as compared to US$ 3.8 billion in the same period last year, according to a report by research firm RedSeer.
Based on the strong festive sales performance, e-commerce is expected to reach US$ 38 billion in sales in CY20 from US$ 27 billion GMV in 2019.
GMV is a term used in online retailing to indicate the gross merchandise value of the products sold through the marketplace over a certain period of time.
“COVID enabled massive growth in new shoppers as consumers now more than ever prefer to shop in a manner that is convenient, safe and hygienic and the e-commerce space meets these requirements. Despite at least a month to go before the sales, consumers show positive sentiments to purchase during this period as per our survey,” RedSeer said.
It added that offline recovery is still weak as consumers are still apprehensive about visiting high human touchpoint areas like malls and retail outlets.
The report said new shopping models are expected to come up, owing to changing customer demographics including video-based and WhatsApp-based shopping to be new additions to the festive landscape.
“Strong nationalist sentiment coupled with the government’s Atmanirbhar policy is expected to impact the brand mix in categories like electronics/mobile,” it added.
Driven by the massive shopper growth, the festive sales for the first event is expected to grow 50 percent year-on-year to reach US$ 4 billion (as compared to US$ 2.7 billion in 2019), the report titled ‘The Festival of Firsts’ said.
The report said this year, ‘Bharat’ and democratisation theme enabled by COVID will see the maximum number of shoppers buy online during festive sales with many coming from tier II cities and beyond.
Festive season sees players holding multiple sale events, timed around Dussehra and Diwali.
On the various categories, the report said fashion will do well due to its relatively slow recovery rates post lockdown. Moreover, increasing social gatherings and aggressive discounts from various shopping platforms would boost sales.
“Mobiles and appliances to remain strong but not as large as previous years as demand for these verticals has been somewhat satiated with category specific sales post lockdown,” it said.
Long tail categories including Home and Home Furnishings are expected do better than anytime before, due to high demand for upgrading work-from-home/study-from-home environment, it added.