The 2024 festive season has been a game-changer for India’s ecommerce sector, driving unprecedented growth and setting new benchmarks. According to the latest report from Redseer Strategy Consultants, online platforms raked in a staggering $14 billion in Gross Merchandise Value (GMV) between September 15 and October 31, reflecting a 12% year-on-year surge. But this growth wasn’t just about volume — it’s about how shopping behaviors and technologies are evolving. From a surge in spending in Tier-II+ cities to the increasing role of AI-powered search, this festive season offered valuable insights into where the future of ecommerce is headed. Let’s unpack the key trends that defined the season and what they mean for India’s digital retail landscape. Source
Shifting Trends: Higher Spend, Slower Shopper Growth
While overall shopper growth took a bit of a dip, there was a silver lining: existing customers spent more, with per-shopper spending up by 5-6%. This suggests that rather than chasing new shoppers, brands are successfully deepening their engagement with current customers.
Tier-II+ Cities: The New Powerhouses
Smaller cities in India are quickly becoming ecommerce hotspots. This year, Tier-II+ regions saw a 13% increase in spending, driven by attractive discounts, promotions, and better shopping experiences. Shoppers here are increasingly willing to buy higher-ticket items, signaling growing confidence in online platforms.
Fashion is on Fire 🚀
The fashion segment had a stellar season, growing 3 times faster than usual, especially in smaller cities. Ethnic wear, jewelry, and accessories were in high demand as customers prepped for festive celebrations. In metro cities, premium and international fashion brands also saw a surge, reflecting varied consumer tastes. On the other hand, Tier-I cities leaned towards premium and international fashion brands. Direct-to-consumer (D2C) brands also enjoyed a boost, thanks to enhanced digital visibility.
Shoppers & Frontline Workers Embrace AI for a Better Shopping Experience
AI is rapidly changing the ecommerce game, making shopping more personalized and efficient. According to Sales force, 17% of online purchases last holiday season — totaling $199 billion globally — were influenced by AI, including predictive and generative technologies. This year, 53% of shoppers are interested in using generative AI to find the perfect gift.
What’s new? It’s not just consumers benefiting from AI. Retailers are empowering their frontline workers with AI-driven tools this holiday season. Imagine store associates using generative AI to serve up personalized product recommendations, helping customers find just the right gift. Even customer service agents are benefiting from AI, enabling them to provide personalized responses to stressed-out shoppers looking for products, orders, or discounts
As platforms like Google embed generative AI into their search capabilities, shoppers are beginning to use more conversational prompts. This shift from traditional keyword searches to natural language interactions is transforming how consumers discover products online.
Companies like Instacart are already leveraging this technology, making product searches more intuitive. This change is paving the way for ecommerce sites to offer more personalized, efficient, and seamless shopping experiences
Electronics & Quick Commerce: A Winning Combo
Premium electronics and home appliances flew off the shelves, largely driven by the extended summer. Quick commerce platforms stepped up, expanding their range to include electronics and household items with extended delivery hours, even promising deliveries in under 10 minutes! The metros — Delhi, Mumbai, and Bangalore — dominated non-grocery sales on key festive days.
