Indian e-commerce companies expect a record-breaking 28 per cent jump in sales to $11.8 billion year-on-year (YoY) during the festive shopping season, Shopify said in a survey.
The growing number of online shoppers, mainly in the Tier-II and Tier-III cities, and increased spending on essentials, electronics and fashion accelerated sales, the Canada-headquartered global e-commerce company said in its “2022 Festive Outlook Survey.”
The study, which covered 1,000 consumers and released on Thursday, noted that “a radical shift in customers’ preferences” during festive shopping, driven by the need for “smarter and convenient shopping options this Diwali,” has contributed to the robust sales growth.
Shopify said the survey aims to highlight the shifting consumer attitude and trends in a post-pandemic India. It said the smart shopping trend “is sticking with the consumers,” demonstrating “a major shift from the conventional approach to festive shopping.”
The study examines the effects of an evolving retail landscape on spending patterns and other trends, which are expected to help businesses explore ideas to stay relevant.
Shopify said the festive sales would further boost online retail gross merchandise value (GMV) from $52 billion in 2021 to $68 billion in 2022, up by 30 per cent.
In a press release, Bharati Balakrishnan, country head and Shopify India director, said, “The digital shift is sweeping Indian consumers towards the next generation of shopping. Diwali 2022 will be a monumental shopping event across the country as consumers spend more than ever before and opt for the convenience of online shopping.
Ushering Into Digital Era
The survey said more shoppers preferred smarter, convenient shopping options for festive purchases. In addition, tier-II and Tier-III cities saw an increased penetration of e-commerce platforms, while more people in rural areas switched to online shopping.
Key trends captured in the survey:
More Spending: Over 85 per cent of consumers plan to spend more than their past budgets, with 40 per cent expecting to pay more than Rs10,000.
Prefer Online Shopping: More than 78 per cent of consumers plan to shop online more than they did in the previous festive season. Consumers choose their trusted offline sellers for festive purchases, while millennials focus more on the convenience of online shopping.
Fashion, Food, and Electronics Lead Sales: Over 81 per cent of consumers prefer to purchase clothing and accessories, about 76 per cent to buy dry fruits, sweets, and chocolates, and around 68 per cent to spend on home electronics and gadgets.
The study found that festive gifts were limited to dry fruits and sweets, unlike last year, when home decor and furnishings led the festive gifting list.
Cashless Payments: Unified Payments Interface (UPI ) is the most preferred payment method, with over 67 per cent consumers opting for it, followed by 45.49 per cent for credit cards, 37.69 per cent for net banking, and 38.68 per cent for reward points.
Festive Shopping Big business For Local Merchants: More than 96 per cent of consumers plan to shop from Indian brands this festive season. It was 57.9 per cent last year, Shopify said. The government’s call to support local businesses and consumers’ growing pride in Indian brands contributed to this shift.
Essentials Surpass Luxury Items: Around 25 per cent of consumers plan to spend on essential items, while 24.51 per cent plan to make the most of the deals. Also, 75.82 per cent of consumers listed discounts and loyalty schemes as top ways to retain their spending.
Rising Interest In Sustainable Shopping: The report said 62.86 per cent of consumers plan to shop more sustainably in 2023, noting that there is a growing awareness among Indian consumers regarding the impact of their purchases on their health and environment.
