India’s smaller cities drive online sales during festive season: Report

New Delhi: There has been a 49 per cent surge in online sales during the festive season this year driven mainly by purchases from smaller cities (Tier-II and Tier-III) in the country, which account for over 60 per cent of sales, according to a report compiled by logistics intelligence platform ClickPost.

The high growth comes on top of a 39 per cent growth in sales recorded in 2023 which reflects the growing personal consumption that is driving India’s economic growth.

The ClickPost report analysed data from 61 million shipments across six major categories — cosmetics, electronics, fashion, furniture, home decor, and jewellery — for September, October, and November in both 2023 and 2024.

According to the report, with 85 per cent of Amazon’s shoppers in the Great Indian Festival coming from non-metro areas, direct-to-consumer (D2C) brands are capturing a larger share of the metro market than large marketplaces.

This increase was driven by efforts to connect more Indians to digital marketplaces, including improved internet access, targeted promotions, and a significant rise in participation from Gen Z and women shoppers.

Gross Merchandise Value (GMV) rose by 23 per cent in the run-up to Diwali, with the biggest gains in electronics, fashion, and home decor. Electronics had an average order value (AOV) of Rs 38,000, driven by personal tech and smart home gadgets. Festive apparel lifted the AOV to Rs 4,000 in the fashion category, while in home decor, an AOV of around Rs 7,900 reflected a push for better, longer-lasting purchases. Promotional offers such as cashbacks and no-cost Equated Monthly Instalment (EMI) options also fuelled the rise in sales, according to the report.

Japanese brokerage firm Nomura also stated in a report that rural areas and smaller cities (Tier-II and Tier-III) maintained steady demand during the festive season showing a higher growth than metropolitan areas in festive consumption across India.

IANS