Festival hype boosts India’s online retail sales in 2021

The massive discounts from retailers bode well for e-commerce companies.

The festive excitement boosting the online sales, along with tier 2 and 3 cities contributing more than before, is set to propel online retail sales in India, which is projected to grow from $46.2b (INR3.32t) in 2020 to $53.8b (INR3.94t) in 2021, according to a report from GlobalData.

Flipkart reported record sales in its ‘Big Billion’ days 2021 with overwhelming demand from the consumers looking for bargains, and witnessed 1.3 times growth in the number of kirana stores and other sellers on the platform. The company claims that Indians saved around $1.54b (INR115b) during the week.

Similarly, Snapdeal reported sales nearly doubling during its first festive sale of the year ‘Toofani’.

Due to the massive discounts offered by retailers, 2021 was bigger and better than before for e-commerce companies, commented Ankita Roy, retail analyst at GlobalData. Electronics and mobiles were especially popular over the Navrati Sale from 2-15 October.

“Shoppers from the rural areas have started to explore online channels, and retailers like Snapdeal and Meesho have done their part to encourage sales from these areas. Such initiatives will lead to an increase in the overall online sales penetration and contribute towards a much-pronounced digital economy,” Roy said.

Given this festive demand, Amazon also doubled its fulfilment network, especially for big-ticket items and furniture. In 2021, Amazon ramped up its storage capacity by 40% with more than 60 fulfilment centres in 15 states.

Observing the growing popularity of online channels in India, Amazon has also delivered 100% serviceable pin codes, out of which 97% of the pin codes are eligible for receiving deliveries within two days of placing orders.

Similarly, Indian e-commerce retailer Meesho allows sellers to sell on the platform without any commissions/charges.

According to Roy, retailers like Amazon have been making efforts to keep up with the massive festive demand by advancing their supply chain operations, especially as supply shortage has been observed for electronics and electrical products after the Navratri sale.

On the other hand, retailers who did not anticipate this surge will lose significant sales as Indian consumers are on a shopping spree during the Diwali period, she said.

“Flipkart and Amazon will be the clear winners during this period as both companies have forecasted this massive demand before and the sellers on these platforms stocked their supplies well in advance,” Roy added.