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India’s e-commerce industry, which is expected to grow at 20-25 per cent annually – nearly double the rate of last year – is poised for significant expansion. According to a report, the gross merchandise value (GMV) is expected to grow to over Rs 1.15 lakh crore during the festive season.

According to a report by Redseer Strategy Consultants, a cut in repo rates, rise in disposable incomes, growing rural prosperity, and pent-up demand in categories such as fashion, home goods and appliances are helping India's festive economy gear up for its most successful phase this year.

RedSeer estimates that India's e-commerce industry, which will be the biggest beneficiary this festive season, will close 2025 with a growth of 17-22 per cent, the highest in three years, thanks to favourable festive conditions.

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Businesses should prepare for a “double peak” in demand, one during the holiday season and the other after Diwali, when the full impact of GST will be felt.

With quick commerce growing by 150 per cent and value commerce growing by 30 to 35 per cent ahead of festivals, both these types of commerce are changing the way consumers shop. Combined, these should drive increased participation in festivals outside metro areas and provide deeper access to tier 2 and 3 markets, according to RedSeer.

The macroeconomic benefits are clear: reduction in borrowing costs due to repo rate cuts, increase in tax-free income limit to Rs 12 lakh (from Rs 5 lakh in FY21), and 12 per cent growth in rural household income over the last four years due to better yields and wages.

The report predicts that rationalisation of GST will be a key structural driver this year.

The slabs are likely to be reduced to just 5 per cent and 18 per cent by Diwali, which will reduce the cost of goods and increase compliance.

According to the report, the overall impact on consumption at the end of the year will be positive, although some expensive purchases may have to be postponed due to uncertainty over timelines.

Fashion, beauty and personal care, and household sectors will continue to grow by over 20 per cent.

Riding on fast-paced commerce, groceries will outperform with 80-90 per cent growth, while mobiles and electronics will witness a festive boost.

According to the report, even though vertical and niche platforms are growing, horizontal platforms are still expected to account for two-thirds of festive sales.

With IANS inputs

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