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E-commerce platforms to clock Rs 90,000 crore in festive season sales in 2023: Report
The upcoming festive season sales of 2023 across e-commerce platforms are expected to clock a gross merchandise value of around Rs 90,000 crore, a report by Redseer has stated.
This figure, which is for the entire festive month would be a growth of 18-20 percent over last year’s festive month sales. Last year, between September 22 and October 23, the total gross merchandise value (GMV) or the total value of merchandise sold across e-commerce platforms stood at nearly Rs 76,000 crore.
Redseer says this year’s sales will be driven by about 140 million shoppers who are expected to be transacting online at least once during this festive month.
While electronics drive most of the purchases during the festive season, Redseer says this year will see increasing contributions from higher margin categories like Beauty & Personal Care (BPC), Home & General Merchandise, Fashion etc. Also, there will be persistent premiumisation leading to rising Average Selling Prices (ASP), it said, adding that increasing ads and promotion revenues is likely to make this year’s festive season the most efficient from a margin perspective.
“Over the last several quarters, we are seeing enhanced GMV contributions from categories beyond electronics. While electronics sell a lot in the festive period, looking at the bigger picture and comparing the festive sale periods over the last several years, there is a clear trend of category diversification,” said Mrigank Gutgutia, Partner at Redseer Strategy Consultants.
Beyond category diversification, Redseer also estimates D2C brands to grow 1.6x as fast as the broader eTailing market (CAGR 2022-27).
In terms of city-tier-wise growth, metros have been growing faster than Tier 1 and Tier 2+ cities in the last few quarters (over 10 percent for metros vs about eight percent for other city tiers).
As per Redseer’s estimates, over these 10 years, the annual GMV for the overall e-tailing industry has grown almost 20 times in the period — from a GMV of Rs 27,000 crore in 2014 to an estimated Rs 5,25,000 crore for 2023 — while the number of annual transacting users has jumped 15x.
This festive season however also comes on the back of a consumption slowdown that the economy has seen due to high inflation.
The e-tailing industry recorded approximately 10 percent annual GMV growth (January – July 2023 vs January – July 2022). However, with the broader economy coming back to business-as-usual levels, it expects this festive season is likely to catalyze online consumption demand.
