E-commerce retailers are expected to garner sales of $11.8 billion in gross merchandise value (GMV) during this year’s festive season, up 28% year-on-year, according to a report by consultancy firm Redseer. The first week of the festival season itself is expected to garner sales of $5.9 billion.
However, the report said that the festive season’s share of annual GMV is dropping, due to increasing frequency of transactions fuelled by sale events throughout the year.
For instance, in 2022, the festive season is expected to contribute 17.4% of annual GMV, while in 2021 it contributed 17.8% and 19.5% in 2020.The festive month is defined as the period starting from the first sales event and lasting roughly till the Diwali week. The improvement in gross merchandise value this festival season is expected to be driven by a spurt in online shoppers, which have increased four times as compared with 2018, on the back of increasing penetration in tier-2 cities.
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Also, participation of online shoppers during the festival season has doubled from the current year 2018 to 38% this year. This has been due to increasing penetration in tier-2 cities, growing expansion of the affordability constructs, and rise of new e-commerce models such as video commerce, the report said.
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However, the report pointed out that spends per online shopper during the festive week is expected to drop 30% from 2018 to 2022, driven by a shift in the category mix, with an increasing share of lower average selling products (ASP) such as fashion, home and beauty & personal care, increasing participation of shoppers from tier-2 cities who tend to buy more low ASP categories like fashion, and increase in acquisition of first-time online shoppers who spend lesser compared to mature shoppers. Overall online retail GMV is expected to increase 30% to $68 billion in CY22, according to the report.