Bengaluru, Nov 13 (IANS): Driven by tier 2 and 3 cities, India’s e-commerce sector registered a gross merchandise value (GMV) of approximately $14 billion (more than Rs 1.18 lakh crore) in this year’s festive season, marking a 12 per cent growth over last year’s festive period, a report said on Wednesday.
This growth was fuelled by resilient consumer spending across categories, including quick commerce, electronics, fashion, beauty and personal care (BPC), home furnishings and groceries, according to the report by Redseer Strategy Consultants.
Higher engagement with premium products and low average selling price (ASP) items alike indicated a dynamic consumer market this festive season (from September 15 to October 31).
While high ASP products such as large appliances and premium electronics saw strong demand in metro areas, affordable items in fashion and BPC continued to drive frequency and growth in the other regions, the report mentioned.
“The 2024 festive season reassures us of Bharat’s (tier 2+ customers) spending potential. With these customers further cementing their trust in e-commerce and bringing a larger share of wallet online, we are ready to witness a continued spell of e-commerce growth in the next few years,” said Kushal Bhatnagar, Associate Partner, Redseer.
Smaller cities displayed the highest growth rate in spends, climbing to 13 per cent in 2024, Availability of discounts enabled tier 2+ customers to afford high-ASP products across categories.
Further, there was a market rise in prepaid transactions which enhanced the shopping experience in the smaller towns.
While the rate of new shopper acquisitions has been slowing down, per-shopper spending increased by 5-6 per cent.
“This could be a long-term trend in e-commerce, wherein shopper base reach has been significantly achieved (with 250 million annual product shoppers), and headroom for retail wallet penetration is still immense,” said the report.
Fashion emerged as the fastest-growing category, with a 3 times growth increase over the business as usual (BAU) months this fiscal. Ethnic wear and accessories drove this growth, particularly in Tier 2+ cities, wherein unbranded ethnic wear, jewellery, and women’s accessories gained traction.
Premium electronics, including air conditioners and large appliances, experienced significant demand due to prolonged summer conditions, the report mentioned.
The quick commerce sector also extended its offerings to include electronics and home appliances, meeting festive demand through expanded delivery hours.