How Dynamic Pricing Helps Brands Win The Festive Discount Battle

India’s festive time has become an important stress test for brands and retailers. The peak season for consumer intent is taking place from August through December which encompasses everything from electronics to apparel.

While there are spikes of exponential demand across certain categories, the predominant response is uniform – more discounts. This approach is effective in the short term, but not sustainable as it eats into margin and conditions consumers to wait for things to go on sale.

The use of real-time consumer data combined with advanced pricing intelligence offers a new alternative. Dynamic pricing – price that responds to demand trends, competitive signals, and behavioral insights – allows brands to be precise rather than using across-the-board discounting. It shifts festive competition from discounting into profitability, agility, and relevance to the consumer.

Why The Discount Race Is Losing Its Spark

The intuitive response to festive demand is to go deeper on price cuts. But research shows that Indian shoppers are increasingly looking beyond just markdowns. While discounts may generate traffic, they also lessen brand equity and compress margins.

As time goes on, consumers start to associate festive shopping with “waiting for the next sale”, which fundamentally reduces full-price demand throughout the year.

This has produced a cycle in which promotions will drive volume but will not drive sustainable profits. With festive competition intensifying, it will not be enough to discount without other supporting levers.

Festive Consumer Behavior, With Numbers

• Recent information highlights how the festive season still has a major effect on India’s consumption economy
• As per several media reports, analysts see 2025 festive order volumes rising 15–20% as shopping from Raksha Bandhan and Independence Day show strong early indicators. In 2024, around $12 Bn in gross merchandise value (GMV) was generated from festive ecommerce, with Tier-II cities growing the most with 13% year-on-year, compared to 9% overall
• On a larger scale, ecommerce in India has now reached $60 Bn in GMV, thus claiming the second-largest online shopper base in the world. Despite current macroeconomic tailwinds negatively impacting profitability in the space, the sector is expected to grow to $170-190 Bn by 2030, while still achieving over 18% annual growth.

Overall, these numbers paint a picture of a rapidly growing market, fuelled by digital adoption and regional participation, but also signals the start of greater competition. As a result, data-led pricing agility becomes critical for brand differentiation.

Comparing 2024 to 2025 highlights this shift clearly. While festive ecommerce in 2024 generated around $12 Bn in GMV, the upcoming 2025 season is already projected to deliver 15–20% higher order volumes.

This year-on-year jump shows how quickly festive demand is scaling – and why relying only on discounting will not be enough. Brands that adopt dynamic, data-led pricing will be positioned to capture this surge more profitably.

How Dynamic Pricing Changes the Game

Dynamic pricing gives a better sustainable festive strategy. Rather than apply a universal markdown, brands can:  

• Segment by intent: AI models can differentiate between browsers, those who abandoned carts and last-minute buyer actions, and set price strategy for each type
• Optimise timing: The price can be adjusted to reflect demand – premium during Diwali or Dussehra, limited for those planning ahead at Onam or Ganesh Chaturthi 
• Protect margins: Brands can offer discounts only on selective, competitive products and retain value on limited, high-demand products.
• Price variability: Instead of automatically discounting, the brand can provide sets with cash back, loyalty rewards, and valued offers as ways to create distinguishing value – the brand feels festive rather than commoditised.

This transforms pricing from a reactive lever into a proactive growth driver – one that balances profitability with consumer satisfaction.

Building A Festive Pricing Strategy For 2025

For brands to thrive this year, they must approach pricing strategically:

1. Invest in intelligence – Set up a system that tracks competitor actions, anticipate demand surges, and understand regional differences
2. Test early – Utilise August–September as a window to test offers and bundles before peak demand season
3. Regional and category localisation – For instance, consumer preferences and purchasing power in Tier-II cities often vary significantly from metros. Accurate, localised pricing is therefore critical to capture demand and maximise revenue
4. Pricing and campaign coordination – Coordinate marketing campaigns around real-time pricing strategies to maintain consistency and legitimacy

The Bottom Line

India’s festive season is now more than just volume; it is now also about strategy. The blunt tool of discounting is becoming less relevant as a tool of reference as consumers are demanding relevance, transparency, and value that is personal to them as individuals.

Dynamic pricing enables to create more room – the brands will be able to respond competitively, and not simply to engage in the race to the bottom. With festive ecommerce order volumes expected to grow by almost 20% in 2025, and India’s online retail market expected to be virtually three times as big by 2030, the message is clear: those brands that intelligently adapt their pricing will not only influence this season’s performance but the retail future.