India’s festive e-commerce hits $14 billion GMV, driven by 13% growth in tier-2+ cities and early sales surge, reveals Redseer report

India’s e-commerce market reached an estimated $14 billion in Gross Merchandise Value (GMV) during the 2024 festive season, revealing changing consumer behaviour and increased online shopping across India, especially in smaller towns, according to a report published by Redseer Strategy Consultants. The report highlights that this season saw shoppers increasingly preferring convenience and a mix of value and premium products, with tier 2+ cities driving much of the growth. These areas showed steady spending and growing comfort with online shopping, marking a broader shift in consumer values and the expanding reach of e-commerce beyond major urban centres.

The season’s initial surge was significant, with over 51% of GMV generated in the first 11 days, indicating strong participation in early sales and reflecting a new trend where both brands and consumers engage heavily at the beginning of the festive season. This early momentum has influenced sales strategies, as brands see an opportunity to capture consumer attention sooner in the festive period, which could have implications for revenue across future seasons.

Tier- 2+ cities led the festive growth, with spending up by 13%—an increase from 9% last year and a growth rate that outpaced that of larger cities. Consumers in these smaller cities showed a willingness to spend on high-value items, including electronics and appliances, particularly when offered competitive pricing. While metro and tier-1 cities continued to participate, they saw a slower growth rate, as some consumers opted for offline channels for high-value electronics purchases. This trend indicates a shift where smaller cities are driving much of the growth in online retail, while metros may be approaching market saturation or moving toward quicker-commerce options.

Even as new customer acquisition slowed, Redseer found that existing consumers increased their spending by 5-6%, reflecting a maturing market where growth is increasingly driven by cross-selling and transitioning more offline wallet share to online. Spending on electronics continued to rise, with metros favouring premium products, while consumers in tier 2+ cities expanded into larger household appliances such as air conditioners and refrigerators, especially as India experienced extended summer months.

Fashion emerged as the top category, achieving threefold growth compared to the yearly average. Ethnic wear, accessories, and sports footwear led the segment, with smaller towns driving demand for unbranded ethnic apparel and jewellery. In metro areas, shoppers preferred premium and international fashion brands, especially through Direct-to-Consumer (D2C) channels. Digital-first marketing platforms like Instagram bolstered brand visibility, attracting customers seeking both luxury and accessibility. Redseer observed that the fashion sector’s growth in smaller cities underscores a strong market for affordable yet trendy options, especially within the expanding reach of D2C brands in apparel, footwear, and luggage.

Beyond fashion, other categories such as premium electronics, home décor, toys, and quick commerce also saw substantial growth. Metro areas showed heightened interest in high-end electronics like gaming laptops, while quick commerce platforms introduced expanded delivery hours and greater incentives for delivery personnel, contributing to festive season demand. Beauty and personal care products continued to perform well, with metros favouring premium options and tier 2+ cities leaning toward affordable brands. Redseer noted that this increase in lower-ticket, frequent purchases reveals a diversification in spending habits as consumers explore a wider range of categories online.