17 October 2023, Mumbai
Consumer Spending Drives Economic Growth
India is witnessing a strong festive shopping season in 2023, backed by a recent study from the Reserve Bank of India that shows the importance of consumer spending, which makes up 60 percent of GDP.
The study also confirms the prediction of a 6.5 percent economic growth for this fiscal year.
E-Commerce to Benefit from High Spending Activity
E-commerce platforms are set to benefit from this high spending activity, with forecasts suggesting not only a boost in the vibrant economy during the festive season but also a consistent spending trend in the next year.
Rise of E-Commerce Sales
The rise of e-commerce sales is especially remarkable. The Ministry of Commerce’s estimates indicate that the e-commerce market will grow to $350 billion by 2030, a significant jump from the estimated $63 billion in 2023.
Indians to Spend $1 Billion on E-Commerce This Year
Indians are likely to spend around $1 billion between October and November this year—a record-breaking amount, 20 percent more than the previous year, according to a consultancy firm based in Bengaluru that specializes in tracking 100 Indian e-commerce platforms, which account for nearly 90 percent of India’s e-commerce sales.
E-Commerce Giants See 15% Rise in Order Volumes
E-commerce giants such as Amazon, Flipkart, Myntra, Ajio, Nykaa, Meesho, and Snapdeal are seeing a 15 percent rise in order volumes during the initial days of their festive sales campaigns, due to the large number of orders.
Consumers Unaffected by Inflation and Higher Interest Rates
E-commerce platforms are happy that inflation and higher interest rates have not affected the excitement of Indian consumers.
This is consistent with the Reserve Bank of India’s finding that consumer confidence reached a four-year peak in September, supported by stable inflation and better employment conditions.
Major Players Breaking Records
Major players in the industry are breaking their records this year. Amazon India’s Great Indian Festival of 2023 has been their most profitable festive campaign so far, with Vice President Manish Tiwary stating that this year’s start has been “unprecedented.”
Long & Short
The strong festive shopping season in 2023 is a testament to the resilience of the Indian economy and the growing popularity of e-commerce.
With consumer spending driving economic growth, e-commerce platforms are poised to benefit significantly from this trend.
5 key insights:
- Consumer spending drives growth
- E-commerce sales to reach $350B by 2030
- Indians to spend $1B on e-commerce this year
- E-commerce giants see 15% rise in order volumes
- Consumers unaffected by inflation, higher interest rates
