'Online festive sales to grow 30% at $4.8 bn this year'

Online festive sales to grow 30% at $4.8 billion this year: RedSeer

The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of Covid

 Representative image. Credit: iStock Photo

Online festive sales season is likely to witness a 30 per cent growth year-on-year at $4.8 billion during the first week this year.

According to a report by homegrown consulting firm RedSeer, these sales are expected to clock $9+ billion gross merchandise value (GMV) during the whole festive month. This is a 23 per cent increase from last year wherein the players clocked a GMV of $7.4 billion.

The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of Covid. Secondly, Tier 2+ cities will continue to drive growth as they are 55-60 per cent of the total shopper base this year, similar or higher than 57 per cent in 2020 festive days, RedSeer’s latest eCommerce Festive Season Report revealed.

On the other hand, as offline retail and mobility are recovering almost up to Pre-Covid levels, this will impact the online festive sale as customers may opt for offline shopping as well. 

Further, categories have been evolving differently during these months which will see an impact during the festive sale as well. While mobile will continue to dominate driven by new launches, electronics are expected to see the second-highest demand driven by the wide range of selection, easy payment options including EMIs and Buy Now Pay Later among other factors. Additionally, Fashion is also expected to see a steady recovery this festive season with greater outdoor mobility of consumers and a steady rebound of fashion and office wear. 

The report finds that the sellers are very bullish on this year’s sales and are looking to recover the losses suffered due to Covid. Nearly 80 per cent of the sellers agree that festive sales will play a key role in recovery from Covid losses while 70 per cent agreed that the bigger online players have been supportive and positive which led up to the sales event. 

The overall online GMV is expected to touch $49-52 billion which is around 37 per cent growth from last year primarily driven by strong consumer funnel expansion and the high adoption of online shopping post-Covid across the categories.

“We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the Covid second wave has passed. At the same time, we see strong bullishness in sellers towards online festive sales as around 80 per cent of them believe that the festive sales will enable them to drive strong sales growth and make up for the losses during the Covid period," said Mrigank Gutgutia, associate partner at RedSeer.

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