India’s e-commerce sector is projected to expand by 20–25 percent annually, almost double the growth rate of the previous year, with expectations of generating over Rs 1.15 lakh crore in gross merchandise value (GMV) this festive season, according to a report from Redseer Strategy Consultants. Factors such as repo rate reductions, increased disposable income, rising rural wealth, and pent-up demand in categories like fashion, home goods, and appliances are set to enhance the festive economy this year. Redseer forecasts that the e-commerce industry will experience its highest growth in three years, closing 2025 with a projected increase of 17–22 percent, largely due to favorable festive conditions.
Businesses are advised to brace for “dual peaks” in demand, one during the holiday period and another following Diwali, when the full impact of the Goods and Services Tax (GST) is expected to be felt. Pre-festive growth has reached 150 percent in quick commerce and 30 to 35 percent in value commerce, indicating a shift in consumer shopping patterns. The combination of these sectors is anticipated to enhance festive participation in tier-2 and tier-3 markets.
Macro factors are also supportive: lower borrowing costs from repo rate cuts, an increased tax-free income threshold to Rs 12 lakh (up from Rs 5 lakh in fiscal 2021), and a 12 percent rise in rural household incomes over four years due to better yields and wages. The report suggests that the rationalization of GST will act as a significant structural driver this year, with potential reductions in tax slabs to 5 percent and 18 percent by Diwali, which should decrease goods costs and enhance compliance. The overall effect on year-end consumption is expected to be positive, although some high-value purchases may be delayed due to timing uncertainties.
Categories such as fashion, beauty and personal care, and home goods are expected to grow by over 20 percent. Rapid commerce will lead to grocery growth of 80–90 percent, while mobile and electronics will also see a festive surge. Despite the rise of vertical and niche platforms, horizontal marketplaces are still anticipated to account for two-thirds of festive sales.
