The logo of e-commerce firm Flipkart at its headquarters in Bangalore. Photo: AFP
The Bangalore office of Flipkart, which has done well from online sales. Photo: AFP

The ongoing Covid-19 pandemic in India has provided a booster dose to the e-commerce industry during festival season, as customers curtailed their visits to offline stores and made online purchases.

During the October-November period, when prominent festivals such as Dusshera and Diwali were celebrated, the online festive sales touched US$8.3 billion, a jump of 65% year-on-year, said consulting firm RedSeer.

These figures have beaten RedSeer’s forecast of $7 billion and director Mrigank Gutgutia observed that consumers have now become more comfortable shopping online and e-commerce has now become more mainstream.

The customer growth figures this festive season is even more impressive. This year it grew 88% from last year, driven mainly by 40 million shoppers from small towns.

Among product categories, mobile phones continued to be a top draw as in previous years, with new launches, festival discounts and finance offers by banks driving up sales, followed by electronics and large appliances.

Fashion apparel sales decreased from last year as restrictions of movement and government directives to curb large gatherings during festivals and weddings discouraged people from venturing out.

RedSeer estimated that Flipkart emerged the leader during the whole festive month, cornering 66% share of the total sale. The Walmart-owned e-tailer saw about 40% growth in its week-long Big Billion Days sales, compared with last year, the Business Standard reported, quoting sources.

Rival Amazon India claimed that during its Great Indian Festival festive sale this year, close to 600 sellers registered sales of more than 10 million rupees, while nearly 6,500 sellers saw more than 1 million rupees in sales. The e-commerce giant claimed a significant chunk of customers were from small towns.

As many companies have now adopted work from anywhere tactics in the wake of the pandemic, there has been a substantial migration of people from cities to small towns. This is now resulting in a growth in e-commerce sales in small cities.

However, the gross merchandise value per customer dropped to 6,600 rupees from 7,450 rupees in the last festive season. The slowing down of the economy and uncertainty over jobs and businesses have made customers more tight-fisted.

India has also entered into a ‘technical recession’ for the first time in its history with gross domestic product contracting for two consecutive quarters. For the second quarter, the economy contracted 7.5%, while in the first it had shrunk a whopping 23.9% as the country went through a two-month long lockdown to contain the spread of the coronavirus.