GST bonanza: Value shoppers turn to premium electronics, appliances this festive season

The festive season is turning out to be promising for consumer electronics and appliances as the category rides on an uptick in consumer demand driven by cost savings from GST reforms, premiumisation, and festive season offers.

Personal electronics and appliances got a strong push during the first week of the festive season sales on ecommerce platforms like Amazon and Flipkart. According to a report by Datum Intelligence, appliances (primarily used for cooking and cleaning) and consumer electronics (for entertainment and communication) clocked gross merchandise value (GMV) growth of 34% and 41% year-on-year, respectively.

While the Indian consumption landscape had been trending towards premiumisation, high-ticket items like consumer electronics and white goods received a further windfall through the recent GST reforms. Introduced by Finance Minister Nirmala Sitharaman earlier this month as a 'Diwali gift' to the middle class, the GST reforms came into effect from September 22, coinciding with the festive season sales.

Under the GST rate cut, most consumer electronics such as televisions, ACs, and dishwashers shifted from the 28% slab to the 18% slab, resulting in price reductions.

Both Amazon and Flipkart gave a 24-hour early access for their shopping subscription members on September 22 to avail the benefits from the Amazon Great Indian Festival and Big Billion Days sales, respectively. Consumers on these paid plans are often high-intensity shoppers, leading to front-loaded purchases, benefiting from the dual advantage of GST-driven price cuts and festive sale discounts.

"Sellers passed on GST benefits worth crores through the Great Savings Celebration #GSTBachatUtsav storefront across appliances, fashion, and essentials," stated Amazon in a press note released two days after its sale launch.

Amazon's Great Indian Festival and Flipkart's Big Billion Days—both started on September 23 for regular shoppers—saw strong traction in the opening week. The first week alone generated about Rs 6,000 crore in GMV, accounting for 51% of total projected festive season sales, a 29% growth from last year.

According to the Datum Intelligence report, appliances, consumer electronics, and mobiles accounted for 64% of festive sale GMV.

During the first two days of its annual festive season sale, Amazon saw double-digit year-on-year growth in air conditioners and dishwashers, as well as a 2X jump in inverter batteries, as customers took advantage of a drop in prices due to reduced GST.

The rate cut benefits were further amplified by consumer preference for premium products such as side-by-side refrigerators, advanced washing machines, energy-efficient split ACs and fans, and air fryers. Premium TVs also showed strong momentum, with QLED and Mini-LED models growing upwards of 23% YoY.

"The purchase of premium products across categories such as mobiles, TVs, and refrigerators witnessed ~26% y-o-y growth in demand," stated Walmart-backed Flipkart in a press note released a day after the launch of its flagship sale.

(The story was updated with festive sale dates.)