Smaller cities propel online Diwali shopping boom

New Delhi: The online Diwali shopping boom this year has been powered by smaller non-metro cities, which account for close to 75 per cent of total e-commerce volumes, according to data compiled by an intelligence platform.

The spending power of smaller cities is further evident from the fact that tier 3 towns contributed over 50 per cent to the surge in consumer expenditure. Data analysis of over 4.25 crore shipments by ClickPost shows that these smaller cities now represent the fastest growth drivers of festive e-commerce.

“The scale of non-metro India is staggering. Tier 3 cities alone accounted for 50.7 per cent of all orders in 2025. Combined with Tier 2 (24.8 per cent), Bharat represents nearly three-quarters (74.7 per cent) of the total order volume, confirming its role as the undisputed engine of e-commerce scale,” according to a ClickPost statement.

Festive demand was further boosted by Durga Puja, which saw fashion orders surge by 14.3 per cent during the pre-Puja week and Karwa Chauth, when cosmetic buys nearly doubled fashion purchases.

Despite the complexity and volume increase, India’s logistics networks maintained a steady average delivery time of 2.83 days for festive shipments. The share of same-day hyperlocal deliveries surged 42 per cent year-on-year to reach 8.7 per cent of all orders.

Cash on delivery remained the preferred method in Tier 3 cities, comprising 52 per cent of orders, even as prepaid digital payments dominated higher-value transactions nationwide.

The average order value jumped 32.5 per cent year-over-year (from Rs 3,281 in 2024 to Rs 4,346 in 2025).

“We’re entering a new era of Indian retail; one where Tier 3 towns out-order metros, where COD still rules the heartland, yet prepaid dominates the premium basket; where home-upgrades, not just outfits, power festive spend. What that means is, investments in speed, fulfilment, inventory intelligence and localised offers are absolutely foundational. The smart players are already preparing for next year’s curve: same-day-blueprint in hundreds of towns, tailored assortments, and delivery models built for both 1 lakh orders and 1 minute gratification,” ClickPost co-founder and CEO Naman Vijay said.

ClickPost handles over 50 million monthly shipments for over 450 brands such as Nykaa, Puma, Caratlane, and Walmart across India, Southeast Asia, MENA, and the US.

IANS