Consumer spending in India is on the rise during the festive season, resulting in a boost to the country’s economic growth. Media reports indicate that people are splurging on various items such as cars, smartphones, and TVs. E-commerce platforms like Amazon and Flipkart have experienced a significant surge in sales, with a nearly 20% increase compared to the same period last year. Additionally, digital payments made through Unified Payments Interface (UPI) have seen a 40% rise in October compared to the previous year.
Economists attribute this positive trend to easing inflation and rising wages, particularly in rural areas. Consumer confidence reached a four-year high in September as reported by the central bank, and there is a strong demand for bank loans, reaching a 12-year high despite interest rate hikes.
According to the International Monetary Fund (IMF), India is expected to have the fastest GDP growth among major economies in 2023 and 2024, with a projected rate of 6.3% for both years. Apart from the festive season, other factors like the Cricket World Cup and the upcoming wedding season are anticipated to further boost consumption.
A recent report by market research firm Redseer Strategy Consultants reveals that online sales from platforms like Amazon and Flipkart reached 47 billion rupees ($565 million) in the week leading up to October 15. The report highlights that high average selling price (ASP) items such as mobiles, electronics, and large appliances have been the key drivers behind this surge, accounting for 67% of the total sales.
Flipkart Group has continued to dominate the market during the first week of the festive season sale, gaining a higher market share compared to the previous year and reaching 63% in terms of Gross Merchandise Value (GMV). Other players in the market, including Amazon and Myntra, also started their festive season sales on October 7, with expectations of achieving online GMV worth Rs 90,000 crore, representing an 18-20% increase from last year’s festive month sales.
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