Driven by tier 2 and 3 cities, India's e-commerce sector has registered a gross merchandise value (GMV) of around $14 billion or over Rs 1.18 lakh crore in the festival season this year, which is 12 per cent more than last year's festive period, a report said on Wednesday.
According to the report by Redseer Strategy Consultants, the growth was driven by resilient consumer spending across categories, including quick commerce, electronics, fashion, BPC, home furnishings, and groceries.
Consumer engagement in premium products as well as low ASP items increased, and this was a dynamic consumer market in this festive season-that is, September 15 to October 31.
While high-ASP products such as major appliances and premium electronics continue to sell in substantial volumes in the metros, affordable items in fashion and BPC continue to drive frequency and growth in other regions, said the report.
"The festive season of 2024 reaffirms spending by Bharat (tier 2+ customers). With these customers further solidifying their trust in e-commerce and bringing a larger share of wallet online, we are ready to experience e-commerce growth over the next few years," said Kushal Bhatnagar, Associate Partner, Redseer.
High growth in spends was witnessed in the smaller cities, which increased by 13 percent in 2024. The availability of discounts ensured that tier 2+ customers bought high-ASP products in all categories.
Prepaid transactions rose and improved the shopping experience in the smaller towns.
The rate at which new shopper acquisitions have been done is still slowing, but per-shopper spending increased by 5-6 percent.
This might be a long-term trend in e-commerce, wherein shopper base reach has been significantly achieved (with 250 million annual product shoppers), and headroom for retail wallet penetration is still immense," the report said.
Within the categories, fashion outpaced others and was the most rapidly growing, posting a three times growth increase over the business-as-usual months for the fiscal year. Ethnic wear and accessories were the leaders for this growth, particularly in Tier 2+ cities, where unbranded ethnic wear, jewellery, and women's accessories picked up.
Premium electronics, including air conditioners and large appliances, witnessed robust demand due to extended summer conditions, added the report.
The quick commerce sector also expanded their offerings to include electronics and home appliances, catering to festive demand through extended delivery hours.
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