Tier-II and Tier-III cities fuel festive season sales: ClickPost report

There has been a 49% increase in online sales during the festive season, a 10 per cent growth over the 39% witnessed in 2023, according to a report by logistics intelligence platform ClickPost

There has been a 49 per cent increase in online sales during the festive season, a 10 per cent growth over the 39 per cent witnessed in 2023, according to a report by logistics intelligence platform ClickPost. This growth has been primarily fuelled by contributions from Tier-II and Tier-III cities, which account for over 60 per cent of sales, according to the report.

 

ClickPost’s report analysed data from 61 million shipments across six major categories—cosmetics, electronics, fashion, furniture, home decor, and jewellery—for September, October, and November in both 2023 and 2024.

 

Tier-II and Tier-III cities, now accounting for over 60 per cent of all sales, were driven by a surge in regional traffic, which increased by 45 per cent. With 85 per cent of Amazon’s shoppers in the Great Indian Festival coming from non-metro areas, ClickPost noted that direct-to-consumer (D2C) brands are capturing a larger share of the metro market than large marketplaces.

   

This surge was backed by efforts to connect more Indians to digital marketplaces, including improved internet access, targeted promotions, and a significant rise in participation from Gen Z and women shoppers.

 

As Diwali unfolded, Gross Merchandise Value (GMV) rose by 23 per cent, with the biggest gains in electronics, fashion, and home decor. Electronics had an average order value (AOV) of Rs 38,000, driven by personal tech and smart home gadgets. In fashion, festive apparel lifted the AOV to Rs 4,000, while in home decor, an AOV of around Rs 7,900 reflected a push for better, longer-lasting purchases. Cashback offers and no-cost Equated Monthly Instalment (EMI) options also contributed to this trend.

 

Fast delivery

 

If there was one game-changer this Diwali, it was the speed of delivery. A 20 per cent boost in hyperlocal partners reduced delivery times to an impressive 2.5 days, transforming shopper expectations around speed. Same-day and next-day delivery became not only a convenience but almost an expectation.

 

Cash-on-delivery (COD) remained popular, especially outside metro cities, with a 3:1 ratio of COD over prepaid for categories like cosmetics and fashion. In metro areas, however, prepaid transactions gained traction, supported by digital wallet rewards and cashback offers on big-ticket items. As COD continues to dominate in non-metro areas, e-commerce companies may need to innovate further to attract these cash-preferred shoppers.

 

An increase in hyperlocal carriers helped trim delivery times, and a 95 per cent on-time delivery rate ensured that shoppers received their purchases exactly when they wanted them, according to the report.

 

This Diwali, returns were more streamlined than ever, especially in fashion, where size and fit issues often lead to higher return rates. Electronics and cosmetics showed modest improvements in Non-Delivery Resolution (NDR) and Return-to-Origin (RTO) rates, while jewellery saw a sharp drop in RTO rates, reflecting a more refined, customer-friendly return process. Brands that made the returns experience easier enjoyed a higher rate of repeat customers.

 

Naman Vijay, co-founder of ClickPost, said that pain points like on-time delivery, RTOs, and customer experience were skillfully tackled, even with the festive rush acting as a stress test for the logistics network. “This is proof that data-driven supply chains don’t just meet demand; they elevate customer satisfaction and drive rapid growth for Indian brands,” said Vijay.