Mint Explainer | What does the festive season sale say about the state of e-commerce in India

But the first six days of the 2025 festival season are telling a different story: gross merchandise value (GMV) has hit ₹45,000 crore, up 22% year-on-year. Could private consumption finally be staging a comeback? Mint explores.

Why 2025 festive sales are under the microscope

E-commerce in India now accounts for $60 billion in GMV, making the country home to the world’s second-largest online shopper base.

Yet, since the pandemic, private consumption has slowed—from 11% during 2017–2019 to 8% in the 2022–2024 period, according to Bain & Company. The slowdown has directly weighed on e-commerce growth: GMV grew just 13% in 2023 and 11% in 2024, according to Redseer.

The festive season, historically a market booster, reflected the same trend.

Adding to the challenge, quick commerce has emerged as a disruptor. While traditional e-commerce growth has decelerated, quick commerce is projected to grow at more than 40% annually through 2030, according to a study by Bain, which was released in March. In the first half of 2025, overall e-commerce grew 14%, as per Redseer data, with quick commerce leading the charge. This year, more than ever, the festive season is crucial for legacy “big box” e-commerce players.

Government intervention gives a shot in the arm

E-commerce players, and retailers at large, had hoped consumers might finally loosen their purse strings, though it was more wishful thinking than expectation.

That changed when the Indian government announced goods and services (GST) rate cuts earlier this month. Under the rationalized GST structure, tax rates have been brought under primarily two slabs—5% and 18%—from four earlier. There is also a new 40% tax on ‘demerit’ and luxury goods such as tobacco, sweet aerated beverages and top-end cars. Most daily use goods have been moved from the earlier 12% and 28% slabs to lower brackets, some slashed outright from 18% to 5%, and a host of essential items exempted from the consumption tax altogether.

The cuts came into effect on 22 September, the day festive sales kicked off, providing a much-needed shot in the arm for retail and e-commerce alike.

The impact was immediate. Redseer shared exclusive data with Mint showing that electronics, including mobiles, led the surge, contributing 65-70% of festive GMV in the first six days. Mobiles, flat during the pre-festive period, grew 20% year-on-year (YoY), while larger consumer durables such as TVs, refrigerators, and washing machines also saw notable jumps in demand. Amazon, reporting on the first 48 hours of sales, confirmed that sellers passing on GST benefits were driving higher purchases across categories.

Has quick commerce spoiled the festive party for legacy e-commerce?

The short answer is a surprising no. Quick commerce platforms grew at 120% to 130% YoY during the first six days of sale. However, that’s the growth rate the category was registering otherwise as well. Their contribution to overall festive sales is under 4% in the period under consideration.

Legacy horizontals e-tailers, on the other hand, saw an over 3x festive spike in their growth and contributed 85% of the festive GMV. Clearly, consumers are demarcating their platform preference. For large-ticket or planned purchases, legacy e-commerce trumps quick commerce, at least for now.

Who’s buying, and what are they buying?

The democratization of e-commerce has never been clearer. For years, companies have invested heavily to tap the promise of “Bharat,” expanding beyond the top metros. This year, tier-2 and smaller cities are taking the lead.

Over 80 million shoppers have transacted in the first six days of the festival season sale, and almost 70% of these shoppers have come from tier-2 and smaller cities and towns. Amazon’s data shows about 70% of traffic was from tier-2 and tier-3 cities.

Premiumization has been a trend for the past couple of years, and this year, too, it is no different. Flipkart saw a 26% growth in premium product purchases year-on-year across mobiles, televisions, and refrigerators. While Amazon did not share overall growth rates of premium products, it highlighted that customers across the country are showing a marked preference for premium products like side-by-side refrigerators, advanced washing machines, energy-efficient split ACs and fans, and air fryers, among others.

Smartphones above ₹20,000 grew at 50% YoY on the platform, for instance, driven by premiumization. Both Flipkart and Amazon’s data cover only the opening days of the sale.

While electronics and consumer durables have led the pack in the start, with a 20% growth YoY, fashion and lifestyle categories are yet to pick up, as per Redseer data.

What’s the verdict so far?

It’s too early to say if the good old days of Indian e-commerce have fully returned, but the festive season is off to a strong start, particularly for horizontal players like Amazon and Flipkart. Redseer reports nearly 22% growth in the first six days of sales. If this momentum continues, Indian e-commerce could see up to 20% YoY growth by year-end.

Amazon has already called 2025 the platform’s strongest-ever festive start, attracting over 380 million customer visits in just the first couple of days. Flipkart is targeting more than 350 million unique visitors across the entire festive period.

The legacy e-commerce players have bettered the quick commerce competition during the start of the festive period. As we head closer to Diwali, gifting and fashion will become more prominent as categories. Here, quick commerce could prove to be strong competition.

For now, however, e-commerce companies are celebrating the return of robust consumer demand.