India's e-commerce industry to generate Rs 1.15 lakh crore GMV this festive season

New Delhi, Aug 27 (IANS) India's e-commerce industry, which is expected to grow by 20–25 per cent annually which is nearly double the pace of the previous year, is expected to generate over Rs 1.15 lakh crore in gross merchandise value (GMV) this festive season, a report has said.

Repo rate cuts, increased disposable income, growing rural affluence, and pent-up demand across categories like fashion, home goods, and appliances are all helping India's festive economy prepare for its most successful run this year, according to a report by Redseer Strategy Consultants.

Redseer predicts that India's e-commerce industry, which will be the biggest beneficiary this festive season, will close 2025 with 17–22 per cent growth, the highest in three years, thanks to festive tailwinds.

Businesses must prepare for "dual peaks" in demand, one during the holiday season and another after Diwali, when the full impact of the GST is felt.

With pre-festive growth reaching 150 per cent for quick commerce and 30 to 35 per cent for value commerce, these two types of commerce are changing the way that consumers shop.

According to Redseer, when combined, they should increase festive participation outside of metro areas and reach tier-2 and tier-3 markets more deeply.

The macro tailwinds are evident: lower borrowing costs due to repo rate cuts, an increase in the tax-free income limit to Rs 12 lakh (from Rs 5 lakh in fiscal 2021), and a 12 per cent increase in rural household incomes over the last four years due to improved yields and wages.

The report predicted that the rationalisation of the GST will be a major structural driver this year.

By Diwali, slabs are probably going to be reduced to just 5 per cent and 18 per cent, which should lower the cost of goods and increase compliance.

As per the report, the overall impact on year-end consumption will be positive, even though timeline uncertainty may cause some expensive purchases to be postponed.

Fashion, beauty and personal care, and home will all continue to grow by more than 20 per cent.

On the strength of rapid commerce, groceries will outperform with growth of 80–90 per cent, while mobiles and electronics will see a festive spike.

According to the report, even as vertical and niche platforms grow, horizontals are still predicted to account for two-thirds of festive sales.

--IANS

aps/na