Ecommerce poised for 20% growth this festive season: Delhivery report
In its report, Delhivery said AI recommendations are playing a key role in shaping consumer choices, with 61% of consumers finding them as extremely beneficial.
The ecommerce sector is poised for nearly 20% growth, Delhivery said in a report on Friday, as India gears up for the festive season.
The report, Direct2Celebrations: Festive Insight for Brands, analysed over 125 million shipments from the last festive season (September - November 2023). It found that about 75% of consumers prefer shopping online over traditional retail, and 60% of online orders are from Tier II cities and smaller towns.
While metros like Bengaluru, Hyderabad, and Mumbai predictably lead in ecommerce orders, the report highlighted that non-metro regions like Raipur, Nagpur, and Indore, among others, are showing increased growth.
It said that almost 84% of consumers purchase based on recommendations from promotions or influencers. Additionally, nearly 62% of consumers try new brands after discovering them on social media.
In fact, AI recommendations are playing a key role in shaping consumer choices, with 61% of consumers finding them extremely beneficial. The report added that about 81% use smartphones or mobile devices to complete their purchases.
Rising demand in fashion and home décor
Every festive season, the fashion category, including women's accessories, jewellery, and kids' clothing, sees high demand, followed by home improvement products, indicating consumers are increasingly focused on home upgrades during festivals.
Technology and electronics are gradually replacing traditional dry-fruit gifts, with mobile phones (44.5%), power banks (43.6%), and washing machines (29%) seeing the highest sales spikes, the report said.
Logistics strain and return management
Delhivery, in its report, highlighted the demand surge during the festive season, with many ecommerce companies, including Amazon, Flipkart, etc, hiring seasonal staff for the upcoming sales.
It said a surge in orders often leads to higher return-to-origin (RTO) rates, with nearly four out of ten cash-on-delivery (COD) returns coming from the apparel and accessories segment.
In the report, Delhivery explained its return management strategy, which focuses on pre-delivery predictions, proactive delivery communication, and streamlined post-delivery returns, helping brands manage high volume efficiently.
With 20% of marketing professionals planning campaigns more than three months ahead, it is clear that early preparation is key to navigating this festive surge, it said.
Edited by Suman Singh