Online Sales Surge to ₹24,200 Crore in First Two Days of Diwali
As Diwali shopping kicks off, online platforms report a massive spike in sales, but rising costs threaten profit margins.
Online festive sales projected to reach ₹1.55 lakh crore, a 25-29% increase from last year.
Companies face significant cost pressures, with margins expected to contract by up to 150 basis points.
Consumer behavior shows a shift towards value-focused purchases amid rising prices.
The festive shopping season in India has commenced with a remarkable start, as online platforms recorded an impressive ₹24,200 crore in gross merchandise value (GMV) during the first two days of sales on October 8 and 9. According to Redseer Strategy Consultants, approximately 8-9 crore orders were placed, with mobile phones being the most popular category. Notably, around two-thirds of these shoppers hailed from Tier II cities and rural areas, indicating a shift in consumer demographics.
The overall online festive sales are projected to reach between ₹1.50 lakh crore and ₹1.55 lakh crore this year, reflecting a growth of 25-29% compared to ₹1.2 lakh crore in 2025. The number of shoppers is anticipated to increase by 14.5%, totaling 158 million, although the average order value is expected to decline by 1.5% to ₹1,554. This trend highlights a growing inclination among consumers to seek value in their purchases amidst economic pressures.
In addition to e-commerce, traditional retailers are also witnessing a surge in demand. Haier India reported a year-on-year sales growth exceeding 30% in the initial days of the festive season, while Wonderchef experienced a 20% increase, driven by premium product offerings. Parle Products noted a substantial rise in packaged food sales, with a 45-50% increase attributed to larger pack sizes. Quick-commerce services have also seen a 15-20% rise in average bill values in urban areas, indicating a diverse range of consumer engagement.
Despite the robust sales figures, companies are grappling with rising input costs that threaten their profit margins. ICRA forecasts that operating margins for a sample of 2,756 listed companies could contract by 100-150 basis points year-on-year in the second quarter of FY2027, even as revenues grow in the low to mid-teens. Factors such as inflation in raw materials and logistics costs are affecting various sectors, including fast-moving consumer goods (FMCG) and automotive industries, where companies are forced to navigate a challenging economic landscape.
Looking ahead, companies are expected to adopt strategic pricing approaches to manage rising costs while maintaining consumer interest. Mahindra & Mahindra, for instance, is banking on new product launches and GST reforms to enhance affordability. Meanwhile, Škoda Auto India has revised prices by up to 1.2% to offset rising input costs. As the festive season progresses, businesses will need to balance promotional strategies with cost management to ensure sustainable profitability, especially as consumer spending patterns evolve in response to economic pressures.
