The survey also estimated that the burgeoning festive sales are expected to boost the total online retail GMV in 2022 to $68 Bn, up 30% from $52 Bn last year
85% of the surveyed consumers plan to spend a record amount this festive season: Shopify Report
Cashless payments as well as deals on fashion and electronics to likely lead this year’s trend
With Diwali just round the corner, Indian ecommerce platforms are expected to clock $11.8 Bn in sales during the ongoing festive sales month.
The estimates were part of the 2022 Festive Shopping Outlook released recently by ecommerce enabler Shopify.
The report also noted that the sales are expected to witness a major spurt of 28% year-on-year (YoY), led largely by fashion sales. The first week purportedly witnessed sales of $5.9 Bn as online shopping, driven largely by a manifold increase in the number of online shoppers.
The study also estimated that the burgeoning festive sales are expected to boost the total online retail gross merchandise value (GMV) in 2022 to $68 Bn, registering a growth of nearly 30% from $52 Bn last year.
In the first disruption-free festive season since the onset of pandemic, the report projected new trends to emerge in the space such as cashless payments and an increasing pre-disposition of users towards fashion, electronics and essentials.
Major Takeaways From The Report
- 78% of consumers shop more online than before the pandemic
- 85% of consumers plan to spend a record amount this festive season
- Cashless payments, and deals on fashion, electronics and essentials lead this year’s trend
- Strong interest in shopping local as 96% of surveyed users bought from Indian brands, up from 58% from 2021
“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. For brands, participating online through marketplaces and their own website is now a given as consumers shift to browsing online before making the trip to the neighbourhood store. And, with some uncertainty around the global economy, buyers are more cautious about where they spend, however, deals and discounts for fashion, electronics and essential items and support for local brands has boosted overall spend,” said Shopify India’s country head Bharati Balakrishnan.
The report surveyed 1,000 Indian consumers from metro and non-metro cities to explore consumer behaviour and patterns of spending over the festive season post the pandemic.
The Fine Print
The report also noted that a growing chunk of online shoppers from Tier-II and Tier-III cities were driving sales during the festive season. Essentials, electronics and fashion were the leading categories of such festive sales growth.
Further, a major chunk of the surveyed users, 40%, expected to spend more than INR 10,000 during the ongoing mega sales. The survey also highlighted the growing role of convenience as millennials preferred online shopping over traditional shopping methods.
Nearly 82% of survey users were predisposed towards apparel shopping while 76% of the total consumers were planning to spend on dry fruits and sweets.
Cashless payments were expected to emerge as the norm, led largely by Unified Payments Interface (UPI), credit cards, net banking, among others.
“Enhanced security of cashless payment processes, combined with added value offered in form of cashbacks, easy EMIs and partner deals, has contributed to the popularity of cashless payment options in India,” noted the report.
Other findings in the report included that discounts and better deals were major drivers of consumer loyalty. Apart from that, it also highlighted that essential items were all set to surpass luxury purchases as consumer preference during the festive sales.
The report also found that close to 62.86% of the surveyed consumers planned to shop ‘more sustainably’ (with regards to health and environment) this year. Additionally, nearly two-thirds of the respondents expressed interest in buying from socially and environmentally-responsible brands.
While trust in the online ecommerce space continues to run high, the report also noted that the Indian online consumer was beginning to prefer local goods, albeit with heavy discounts.
Perusal of industry data by Inc42 previously found that the average user spend during the first week of the festive season stayed steady, not growing at all. While Shopify claims that the number of online shoppers during the current festive season grew 2X since 2018, a RedSeer report estimates that the number of active shoppers this festive season will settle 60% lower than the numbers reported in 2020.
Yet it’s a fact that online shopping in India has come a long way and the pandemic has just augmented its growth over the years. While the overall ecommerce adoption story is intact, reports of online shopping coming to a saturation point can’t be ignored.
Reasons could be opening of the malls and stores and a growing online shopping fatigue especially in metro cities. However, Tier-II and III cities are better markets for these ecommerce players. As Amazon said today, 80% of its new shoppers are coming from these cities. So, it’s good enough to say that Indian ecommerce companies are still hungry for the Indian ecommerce market which is expected to soar to a $400 Bn market opportunity by 2030.
