An Inside View of Diwali Online Sales

Kinnary Nensee Kinnary Nensee
Oct 5, 2022 8 min read
An Inside View of Diwali Online Sales

The Indian eCommerce industry is predicted to increase by 21.5% to reach a valuation of USD 74.8 billion by the 2022 year-end. Much of this amount is a result of the high sales clocked during festival times.

Diwali is just around the corner. The last two years spent in trepidation and reluctant celebrations have whetted appetites for a larger-than-life celebration this festive season. This means that the retail market is looking forward to successful festive season sales. As much as the world is now operating almost up to the pre-pandemic levels, online shopping has only gained momentum and preference.

Diwali – the festival of lights is a symbolic representation of the victory of good over evil, knowledge over ignorance, and light over darkness. Celebrated for over five days in the Hindu month of Kartika, the festival is largely associated with the deities Lakshmi, Goddess of prosperity and Ganesha, God of wisdom and remover of obstacles.

The time leading up to the festival is spent in enthusiastic preparation for the celebrations. Homes and offices are thoroughly deep cleaned, renovated and decorated. A variety of snacks are prepared or bought, family get-togethers are planned and, of course, a lot of purchasing is done.

Commercial Significance of Diwali
2020 – The Demarcation Year
Diwali Sales
Reasons for Successful Diwali Online Sales

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Commercial Significance of Diwali

Traditionally, Diwali has been associated with prosperity and wealth creation. The auspiciousness of the festival is celebrated by the purchase of precious metal items like gold and silver on the 1st day of this five-day festival – β€˜Dhanteras’. The day is also considered auspicious for the purchase of big-ticket items like property, cars and other white goods like electronics.

The business community conducts a religious ceremony of their account books to celebrate the beginning of the traditional business new year. This time is considered particularly auspicious to begin new projects and make new investments.

The Dalal Street’s stockbroking community has been practising β€˜muhurat trading’ on Diwali to celebrate a fortunate start of the new year. Investors place token orders to hold for a long period of time and traders book intra-day profits which normally allows the Sensex to close on a positive note due to high trading volumes.

The festival of Diwali is followed by the wedding season – adding to the euphoric shopping mood prevailing within the country. The shopping frenzy is fed by irresistible limited-period offers and mega discounts offered by brands through omnichannel marketing.

2020 – The Demarcation Year

This year will undoubtedly go down in history as the time when the world stood still due to the Covid-19 pandemic. For more than six months, the global lockdown wreaked havoc on the economy, with businesses being shut and people retreating to the safety of their homes.

As restrictions eased, the world slowly came back to life and the struggle for normalcy began in earnest. In many ways, it was a kind of re-emergence of the human race. A demarcation of sorts. Since then, everything has been segregated into pre-pandemic and post-pandemic, including the retail sales market, especially for festival shopping.

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Diwali Sales

Diwali Business Sales from 2016 to 2021
Diwali Business Sales from 2016 to 2021

The beginning of eCommerce in India can be traced back to 1995 with the introduction of the internet. The first wave of eCommerce in India was slow, inefficient, and had low consumer acceptance. After the dot-com bubble burst in 2000, the eCommerce business in India was muted and low-key. It was only after 2005 that the eCommerce business developed significantly, especially in the areas of retailing, group purchasing, travelling and societal interaction.

As the online shopping phenomenon grew and penetrated new markets and reached wider audiences, the heavy weights of the industry like Amazon, Flipkart, and Myntra became more and more aggressive in their discounts and sales. Festival sales became a large phenomenon, with most sales timed around the Diwali season.

Since the eCommerce industry gained a sturdy foothold in India, Indian e-tailers have given their customers a big reason to celebrate with whopping discounts, limited-time deals and easy payment options during the Diwali season. Indian online shoppers have always shown consistent loyalty to discounts and dealsβ€”a fact not missed by e-tailers.

Pre-Pandemic Diwali Sales

The year 2018 saw the e-tailing industry rake in a GMV of INR 15,000 crores between the Diwali sale period of one week – October 9th to October 14th. This was a steady growth from INR 5,300 crores in 2015 and INR 11,200 crores in 2017. Leading the eCommerce industry for the festive season were Flipkart and Amazon, closely followed by Snapdeal and Myntra. The festive discounts were primarily driven by the sales of mobiles and fashion verticals, which grew by 70% and 78% respectively from the previous years. Other categories that witnessed significant shopping were Electronics, Women’s and Men’s fashion, and furniture.

The year 2019 saw a continuation in the growth of Diwali online sales. The total earnings for e-tailers for Diwali 2019 touched an all-time high of INR 35,000 crores. Product categories like mobiles, large appliances, home dΓ©cor and electronics saw a surge in demand. Other categories like beauty, food, health, fashion, and clothing also saw a demand increase for the festive season. Apart from this, eCommerce companies were also incentivising customers through multi-media access like mobiles, tablets and laptops.

Post-Pandemic Diwali Sales

March 2020 sent the world into hiding in a bid to survive the biggest health crisis. As life re-adjusted to new norms, newer trends emerged, both professionally and personally. Ecommerce became the preferred shopping method even as offline stores struggled with restrictions.

The festive Diwali season for this year was dictated by affordability and ease of access to a wide assortment of products. In a bid to make up for losses during the long lockdown period, eCommerce players held multiple sale events around Dussehra and Diwali. The response from their customer base surpassed estimated figures to reach INR 58,000 crores, recording a 65% surge from the previous year. Flipkart and Amazon accounted for the lion's share of 88% of the entire Gross Merchandise Value (GMV).

Mrigank Gutgutia, Director of the research firm Redseer said, β€œThe overall growth story has been very bullish this festive season. We had foreseen USD 7 billion of sales but the actual figures surpassed our expectations fairly comfortably, showing how comfortable consumers have become with shopping online even in this pandemic hit year. And it has proven that with the right assortment at the right prices which is delivered quickly in the safety of customer’s homes, the value proposition of e-commerce is very powerful.”

The Redseer report also noted that a large chunk of online shoppers came from tier II and beyond cities. Interestingly, the fashion segment demand dropped in 2020 and demand for categories like home and home furnishings went up due to an upgrade in the work / study-from-home environment.

As time went by and 2020 dawned into 2021, the journey to normalcy gained momentum with vaccination drives being held throughout the country. Despite inflation and the ongoing pandemic, eCommerce companies were ploughing the way for higher sales and further growth and the Indian consumers did not disappoint. 2021 Diwali saw decade-high sales figures of INR 125,000 crores. As with the previous year, the highest selling categories were home furnishings and food clocking an increase of 42% and 18% respectively. Items such as earthen lamps, candles, footwear, watches, toys, consumer durables, electronics and kitchen articles and accessories also did well. Ecommerce players saw a 5X growth and clocked 3 crore orders in the pre-sale and sale periods combined.

2022 Diwali sales figures are set to soar even higher as consumers are all set to welcome this festive season enthusiastically. The heavy weights of the eCommerce industry are well-equipped to meet the high demand of the festive season as people wait for the next sale dates to be announced.

As per Redseer's report, INR 24,500 crore (USD 3.5 billion) in sales were registered for the first 4 days (22nd–25th Sept) of the first festive sale event of Diwali 2022. This figure contributed to 60% of the projected GMV for festive sale 1, showing a 1.3x growth compared to the previous year, which contributed to 59% of the projected GMV.

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Reasons for Successful Diwali Online Sales

The shift to online shopping, especially during the Covid-19 pandemic has been one of the strongest catalysts fuelling the online Diwali sale drive. There are moreover, a few other reasons due to which Diwali festival sales are seeing steady year-on-year growth.

Preferred Mode of Purchase by Indian Households for Their Festive Season Shopping
Preferred Mode of Purchase by Indian Households for Their Festive Season Shopping

E-tailer Initiatives

Online e-tailers are employing tools like flash sales, Card offers, free delivery and no-cost EMIs for large ticket purchases. These tools make it easy to customers to make their purchases. Flash sales often trigger impulse buys by customers, especially on first-time products which are, usually, not discounted. Added to this are the special rewards attached to specific credit cards which further add to the deep discounts and offer extra cashback. These initiatives are then coupled with easy exchange/return policies and extended warranties, which are difficult to resist and convert into successful sales.

Top Wallet & Bank Card Offers

E-tailers enter into strategic partnerships with banks like HDFC, SBI, ICICI Bank, Standard Chartered, American Express, etc. They then offer exclusive privileges and financial benefits to their customers.

Personalized Product Feed

The shopping history of a consumer is an information mine for the e-tailer. They track the shopping habits of the consumer and based on shopping preference, feed the customer with product details and oncoming deals through their social media, WhatsApp, etc.

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What was just a decade ago, a traditional industry with customers shop-hopping on particular sale days or weekends, has become a finger-trigger industry that allows the customer the convenience of shopping from the comfort of their homes.

It is no wonder, then, that the eCommerce industry has gained popularity and has become the preferred medium of shopping. There is no doubt that it has a better market penetration, a better product catalogue on one platform, and, in some cases, better deals to offer the customer.


What are the reasons for successful Diwali online sales?

Some of the most popular reasons for successful Diwali online sales are:

  • E-tailer Initiatives
  • Top Wallet & Bank Card Offers
  • Personalized Product Feed

What sells the most on Diwali?

Items such as sweets, dry fruits, earthen lamps, candles, clothing, home decor, footwear, watches, toys, consumer durables, electronics, and kitchen articles and accessories sell the most on Diwali.

Will Flipkart have a Diwali sale?

Flipkart is expected to have the 'Flipkart Diwali Sale 2022' between 17th and 23rd October 2022. Before that, the platform will have its 'Big Dussehra sale 2022' from 5th to 8th October 2022.

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