Early Diwali: Fomo, premiumisation light up e-commerce festival sales

GMV rises 16% to Rs 29,000 crore in first four days of mega events, says Redseer report

4 min read Last Updated : Oct 13 2023 | 11:36 PM IST

The first four days of this year’s festival season sale have been nothing short of a blockbuster for the e-tailing industry, which clocked 16 per cent growth in gross merchandise value (GMV) over last year to about Rs 29,000 crore, according to a report by Redseer Strategy Consultants.

The driving force behind this surge, the Redseer report said, is a potent mix of “fear of missing out (Fomo)” among Indian consumers and the trend of premiumisation, made possible by accessible financing options. These factors led to a stronger Day 0 and Day 1 of Week 1 of the 2023 festival season sales.

While Flipkart’s “The Big Billion Days (TBBD)” kicked off on October 8 (early access for VIP and Plus customers was granted on October 7), Amazon India’s Great Indian Festival (GIF), too, began on the same day with access for Prime members beginning a day earlier. The mega sales events of other e-tailers, such as Snapdeal and Meesho, are also ongoing.

“Premiumisation is evident this festival season as consumer discretionary spending in high ticket categories has performed well,” said Mrigank Gutgutia, partner at Redseer. “Further, steady growth in overall sales and the high ASP (average selling price) categories reinforces the belief in the strength of the Indian consumption story. However, these are initial findings from the start of the festival month; we are closely looking at the emerging trends… to draw stronger conclusions on how consumption is evolving.”

Platforms selling products from the high-ASP categories, such as mobile phones, electronic items, and large appliances, witnessed a sharper increase in the average order value over business as usual (BAU) this year vis-à-vis last year. Consumers also took advantage of the “pre-book and price lock” feature – an industry-first feature that allowed them to lock in prices for high-value products before the festival sale began.

This, coupled with attractive deals on high-ASP items and easy financing options like “no cost EMIs”, encouraged consumers to make their choices in advance to avoid missing out on these deals. As a result, Day 0 of the 2023 festival sales events or the early access day saw a 10x increase in sales over business as usual (BAU), while Day 1 saw an over 7x increase in sales over BAU.

The later part of the Week 1 of the 2023 festival sales events, according to Redseer, could witness strong traction in the low-ASP categories, as well. Customers may buy in large numbers from categories like fashion, beauty and personal care, and home.

Earlier, Flipkart and Amazon reported that a significantly high number of customers thronged their shopping platforms at the start of their mega festival sales events. While Flipkart’s TBBD, which will run until October 15, garnered 91 million customer visits until Day 1, Amazon India’s month-long GIF generated a record 95 million customer visits in the first 48 hours.

E-commerce firm Snapdeal said it is expecting 30-40 per cent year-on-year growth during the festival period. SoftBank-backed e-commerce company Meesho said it was “delighted by the exceptional response” to its flagship Mega Blockbuster Sale. The company said that tier-II, tier-III, and tier-IV cities/towns accounted for 70 per cent of orders.

E-commerce retailers are expected to garner sales worth Rs 90,000 crore this festival season, 18 to 20 per cent higher than last year, according to another report by Redseer. This shall be driven by about 140 million shoppers who are expected to be transacting online at least once during the festival month.