E-commerce platforms are expected to potentially clock over USD 9 billion gross GMV (Gross Merchandise Value) during the festive season this year as against USD 7.4 billion last year – a growth of 23 per cent, consulting firm RedSeer said on Thursday.
For the full year, the overall online gross GMV is expected to touch USD 49-52 billion, which is around 37 per cent higher than last year (USD 38.2 billion), primarily driven by strong consumer funnel expansion and the high adoption of online shopping post-COVID across the categories, RedSeer said in its eCommerce Festive Season Report.
During the first week of the festive season, online platforms are expected to register 30 per cent year-on-year growth in gross GMV to USD 4.8 billion, it added.
Gross GMV refers to total value of goods sold on platform prior to subtracting cancellation or return.
“The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of COVID. Secondly, tier-II cities and beyond will continue to drive growth as they are 55-60 per cent of the total shopper base this year, similar or higher than 57 per cent in 2020 festive days,” Mrigank Gutgutia, Associate Partner at RedSeer, told reporters.
On the other hand, as offline retail and mobility is recovering almost upto pre-COVID levels, this will impact the online festive sale as customers may opt for offline shopping as well, he added.
In terms of categories, mobile will continue to dominate – driven by new launches – and account for 11 per cent of the gross GMV (USD 4.8 billion) in the first week of festive sale.
Electronics and Appliances category will continue to grow (from 14 per cent share festive sale last year to 16 per cent this year), driven by ever-expanding selection and reach, and consumers holding back their purchases (earlier in the year) in anticipation of new launches and attractive pricing (as per Redseer survey), Redseer said.
Affordability constructs, including EMIs and Buy Now Pay Later (BNPL) are expected to be a strong growth lever in this category, it added.
Fashion, as a category, is also expected to see a steady recovery this festive season – in line with greater outdoor mobility of consumers and steady rebound of fashion/office wear, RedSeer said. The report found that sellers are very bullish on this year’s sales and are looking to recover the losses suffered due to COVID.
Nearly 80 per cent of the sellers surveyed said festive sales will play a key role in recovery from COVID losses.
“We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the COVID second wave has passed. At the same time, we see strong bullishness in sellers towards online festive sales as about 80 per cent of them believe that the festive sales will enable them to drive strong sales growth and make up for the losses during COVID period,” Ujjwal Chaudhry – RedSeer Consulting Associate Partner, said.
Driven by above, RedSeer expects strong 30 per cent y-o-y growth in festive sale week in 2021 to reach USD 4.8 billion in gross GMV with growth across categories, and setting the stage for a strong year for e-commerce in 2021, he added.