Online retail saw a 25 per cent y-o-y growth in terms of gross merchandise value during the festival month this year, with Tier 2+ cities driving this growth and contributing over 57 per cent, according to a report released by Redseer Strategy Consultants.

This year, a majority of the platforms held their festival sale during between September 22 and October 23. For platforms that did not run a sale during any of these dates, the report had considered business as usual order volumes.

“Democratisation of categories continued this year as well, with lower order value items growing faster than mobiles and electronics. While mobiles and electronics continue to dominate category share, home and kitchen, groceries and beauty, personal care items were the fastest growing categories. Grocery grew almost twice as much as the last year festival salel,” says Sanjay Kothari, Associate Partner, Redseer Strategy Consultants.

Small cities, towns

Festival sales have largely become a Tier 2+ phenomenon with 64 per cent of transacting shopper coming from Tier 2+ cities. Fashion leads category adoption in Tier 2 cities, led by unbranded fashion, wherein one in every five orders had a kurti or saree in their cart. Within beauty segment, makeup was the most sought after category with a lot of interest in looking-and-feeling good items.

In home furnishing and décor, cushion covers, showpiece and decor accents contributed most to the growth. From RedSeer’s consumer surveys, gifting emerged as a strong reason for purchase across categories and consumers reported an increase in the overall satisfaction with online platforms.

Further strengthening the online retail ecosystem, this festival saw robust growth for majority of sellers. “Three in four sellers we surveyed reported at least double volume growth from business as usual during sale days, with strong support from platforms in planning and executing the festival season well. This increase was more visible in lower average selling price category like fashion where 42 per cent of the sellers reported a 3X to 5X growth from business as usual,” Sanjay further added.

Offline retail stores have seen robust footfalls during Diwali this year, which is also evidenced by growth seen from movements in Google Mobility Index. Redseer has used consumer surveys, seller surveys, partner surveys, big data sources, expert interviews, mystery shopping, and other data such as app downloads and public reports like import data on mobile shipments to bring out data for the festial sale report.

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