Shopify Predicts $11.8 Bn Online Sales in India’s Festive Shopping Season
Shopify allows retailers to sell local products across the internet. The Canadian multinational company has high hope of sales growth in India when festive season kicks in with Diwali. In a survey, Shopify found that Indian retailers are expecting an impressive growth of 28 percent in online sales to $11.8 billion year-on-year (YoY) during the upcoming shopping season.
Titled ‘2022 Festive Outlook Survey,’ the survey released on Thursday claimed that the number of online shoppers is expected to grow primarily in tier-II and tier-III cities of India. The shoppers from these regions have increased shopping online for essentials, fashion and electronic goods.
Diwali 2022 will be a monumental shopping event across the country as consumers spend more than ever before and opt for the convenience of online shopping.
Bharati Balakrishnan, Country Head and Director, Shopify India
India’s Bet on Diwali
The 2022 Festive Outlook Survey studied 1,000 consumers from all across India. It predicts “a radical shift in customers’ preferences” as they need “smarter and convenient shopping options this Diwali”.
Bharati Balakrishnan, Country Head and Director, Shopify India, called the festival of Diwali a “monumental shopping event,” adding that people are now much more comfortable than ever in shopping online.
“The digital shift is here and it’s sweeping Indian consumers towards the next generation of shopping. Diwali 2022 will be a monumental shopping event across the country as consumers spend more than ever before and opt for the convenience of online shopping,” Balakrishnan said as quoted by Business Wire India.
“For brands, participating online through marketplaces and their own website is now a given as consumers shift to browsing online before making the trip to the neighbourhood store. And, with some uncertainty around the global economy, buyers are more cautious about where they spend, however, deals and discounts for fashion, electronics and essential items and support for local brands has boosted overall spend,” she added.
Smart Shopping
The survey found that the consumer spending attitude changed after the coronavirus pandemic. E-commerce in considered as smart shopping. Shopify predicts that this change in attitude is going to stick with consumers for a long period of time. With Diwali around the corner, this attitude might cause “a major shift from the conventional approach to festive shopping.”
Diwali is one of India’s biggest and most celebrated festival. People tend to spend more on consumer goods. While brick and mortar stores witness high footfall during this festival season, competition has increase online as well. Shopify’s survey claims that merchants must explore new ideas to stay relevant in high competition online.
Mentioning gross merchandise value (GMV) of online retail, the survey predicts that the number might grow by 30 percent from $52 billion in 2021 to $68 billion in 2022. With people opting for smarter and convenient shopping options, Indian e-commerce target more of business from rural regions, tier-II and tier-III cities.
Here are highlights from the 2022 Festive Outlook Survey:
- Spending Power: The survey found that more than 85 percent of online shoppers are ready to spend more than what their budgets allow. As much as 40 percent of consumers are expected to spend over Rs 10,000 in online shoping this festive season.
- Shop Online: Over 78 percent of shoppers from India are planning to online shop more than what they did last year. While conventional shoppers are expected to trust brands over new e-commerce businesses, millennials will choose convenience over anything while shopping online.
- Hot Picks Online: More than 81 percent of consumers are expected to shop online for food, fashion and electronic goods this festive season. As much as 76 percent of online shoppers are expected to online shop sweets, dry fruits and chocolates, while 68 percent are expected to buy electronic goods.
Diwali is the festival of light. People tend to spend on electronic goods for home and exchange sweets, dry fruits and chocolates with friends and family members. Last year, furniture and home decor items led the list of festival gifts shopped online.
- No Cash: The survey found that consumers don’t like to carry cash anymore. Online shopping portals offer cashless payments option, which is attracting more of Indian shoppers. Among all cashless users, more than 67 percent of consumers prefer Unified Payments Interface (UPI), while 45.49 percent like to use credit cards, 37.69 percent prefer net banking and 38.68 percent look for reward points with every transection online.
- Shop Local: While foreign brands ruled most of the e-commerce business in the past, 96 percent of shoppers are expected to prefer India’s local brands this festive season. Last year, only 57.9 percent consumers chose local merchants over foreign brands. Government’s Made in India initiative is also motivating Indian merchants to set up online stores and sell online.
- Essentials Over Luxury: While consumer spending power has increased in the recent past, 25 percent of shoppers are planning to buy only essential goods. Around 24.51 percent of consumers are looking for the best of deals online, 75.82 percent consumers rely on discounts and loyalty schemes to make online purchases.
- Sustainable Shopping: Consumers are not only smart about their spending but also about the environment. As much as 62.86 percent are expected to buy products that support a sustainable future.