14 hrs ago
Festive E-Commerce Sales Shift Toward Volume as Discounts Tighten
Online shops are expected to sell more during this festive season.
But products cost more than they did last year, and shops have less room to offer very large discounts.
Last year, tax cuts helped make some products cheaper, but there is no similar help this year.
Higher costs and a weaker rupee have also pushed prices up.
Many shoppers may choose cheaper products and spread their spending across smaller purchases.
The average amount in a shopping basket is expected to fall slightly.
Smartphone sales growth may slow because phones are more expensive and shoppers have limited spending money.
Overall, online sales can still grow, but more through selling extra items than through big price cuts.
Online festive sales are forecast to rise 25–29% to Rs 1.5–1.55 lakh crore, despite tighter discount headroom.
Prices across seven tracked e-commerce categories are above last October’s festive-sale levels, with laptops up 41% and smartphones up 10%.
Last year’s GST cuts helped lower prices for several categories; this year there is no comparable tax benefit, while input, freight and currency pressures have raised costs.
Datum expects smartphone festive sales growth to slow to 6% from 26% last year, while consumers are projected to make more, smaller purchases.
Flipkart’s festive item sales are expected to grow 34%, compared with 20% growth in sales value, indicating a shift toward lower-priced products.
- Who
- E-commerce platforms and consumers in India; Datum and 1digitalstack.ai provide forecasts and data.
- What
- Festive online sales are expected to grow, but with less reliance on deep discounts and more emphasis on higher sales volumes and affordable products.
- Where
- India’s e-commerce market.
- When
- The current festive season; the article compares it with last October’s festive sales.
- Why
- Higher product and freight costs, a weaker rupee, and the absence of last year’s GST-cut benefit are limiting platforms’ ability to discount.
Growth outlook
Spending pressures
Overall festive sales
Growth outlook
Datum expects online festive sales to rise 25–29% to Rs 1.5–1.55 lakh crore.
Spending pressures
Higher prices and limited consumer spending power are expected to restrain demand in some categories, including smartphones.
How sales growth may happen
Growth outlook
More items and affordable products could sustain sales growth; Flipkart’s item sales are forecast to grow faster than sales value.
Spending pressures
Platforms have less room for deep discounts because prices and costs have risen and this year lacks last year’s GST-cut benefit.
Key facts
- Forecast online festive sales
- Rs 1.5–1.55 lakh crore, up 25–29%, according to Datum
- Average basket size
- Projected to decline 1.5%
- Smartphone sales growth
- Datum expects 6% growth this festive season, compared with 26% last year
- Laptop price change
- Average selling prices across the tracked categories are 41% above last October’s festive-sale level
- Consumer discount preference
- 57% of consumers surveyed by Datum cited discounts as their main reason to shop online
- Median planned shopper spend
- Rs 12,500, about Rs 300 more than last year
- High-spending shoppers
- 7% plan to spend more than Rs 50,000, down from 12%
- Flipkart forecast
- Festive item sales are expected to grow 34%, while sales value is projected to rise 20%, according to Datum
Sources
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