Festive sales boost e-commerce to $14 bn GMV as tier-II+ cities lead growth

Fashion segment and electronics driven by quick commerce platforms in major cities Delhi, Mumbai, and Bangalore

India’s e-commerce sector recorded 12 per cent year-on-year growth during the 2024 festive season, spanning September 15 to October 31, with a gross merchandise value (GMV) of approximately $14 billion, according to Redseer Strategy Consultants' latest report released on Thursday. This performance underscores shifting consumer behaviour and increased contributions from smaller cities, particularly Tier-II+ regions.

 

The report noted a slowdown in overall shopper growth but highlighted a 5-6 per cent increase in per-shopper spending, indicating a maturing market. High-value items like premium electronics and large appliances were in strong demand, especially in metro cities. Meanwhile, affordable fashion and beauty products continued to drive frequent purchases in smaller towns, sustaining consistent growth.

   

Key trends in e-commerce during the festive season

 

Decline in shopper growth, but higher spend per shopper

Though new shopper acquisition slowed, existing customers increased their spending by 5-6 per cent, reflecting deeper retail wallet penetration.

 

Resilient spending from Tier-II+ cities

Smaller cities reported a 13 per cent rise in spending. Discounts and promotions enabled customers in these regions to buy high-ASP (average selling price) items, boosting overall GMV. Prepaid transactions also increased, enhancing the shopping experience and further engaging these markets.

 

Surge in fashion segment

Fashion emerged as a standout category, growing three times faster than usual, driven by demand for ethnic wear and accessories in Tier-II+ cities. Unbranded ethnic wear, jewellery, and women’s accessories gained traction, while premium and international brands performed well in Tier-I cities. Direct-to-consumer (D2C) brands also benefited from improved digital visibility.

 

Strong demand for electronics and quick commerce

Premium electronics, including air conditioners and large appliances, saw a significant rise in demand due to prolonged summer conditions. Quick commerce services expanded their offerings to include electronics and home appliances, meeting festive demand with extended delivery hours.

 

Non-grocery sales spiked on key festive days, with Delhi, Mumbai, and Bangalore leading as top-performing cities.

 

Commenting on the report findings, Kushal Bhatnagar, associate partner at Redseer Strategy Consultants, said, “The 2024 festive season reassures us of the growing spending power in Bharat (Tier-II+ customers). These consumers are increasingly trusting e-commerce and contributing more to the online retail landscape. As quick commerce services expand, we foresee a transformation in the way products are delivered across India, with the potential for deliveries within 10 minutes reshaping the consumer experience.”