Festive Frenzy: How E-Commerce and Quick Commerce Battled for India’s Sales
The 2024 festive season in India has been nothing short of a shopping bonanza. With e-commerce giants like Amazon and Flipkart pulling out all the stops with extensive sales and discounts, and quick commerce players like Blinkit, Zepto, and Swiggy Instamart delivering everything from festive essentials to pooja items in minutes, consumers were spoilt for choice.
While e-commerce has a stronghold over large orders and big-ticket items, quick commerce has carved a new niche, offering instant delivery and convenience for those last-minute festive needs. Let’s see how they fared this time.
E-commerce for Big-ticket Sales
E-commerce platforms dominated when it came to high-value products. The total sales during the month-long festive season hit over ₹1 lakh crore (around $11.9 billion), an impressive 23% increase from last year’s ₹81,000 crore, according to industry data. In just the first week, sales reached ₹55,000 crore ($6.5 billion) due to events like Flipkart’s Big Billion Days and Amazon’s Great Indian Festival, which launched on September 26.
Now, let’s look at the sectors that helped drive this growth.
Amazon and Flipkart have been investing in expanding delivery networks, especially in non-metro areas, to address this demand. The result? There is steady growth of Tier 2 and 3 shoppers, who are now contributing significantly to sales.
Electronics, beauty, and home decor topped India’s 2024 festive sales. Flipkart witnessed a record 282 million unique visitors during the festivities. Meesho’s sales also witnessed record numbers as the platform was visited by 120 crore customer visits with categories such as home & kitchen, fashion as well as beauty & personal care garnered more than 72 orders per second.
Electronics and tech gadgets like smartphones, TVs, and laptops led demand, with over 85% of Amazon’s customers from non-metro areas, highlighting the rising appetite for tech upgrades even in Tier 2 and 3 cities. Smartphones were the top-selling category, with online purchases accounting for 65% of total smartphone sales, driven by attractive deals and financing options and EMIs.
Moreover, the fashion and beauty segments also saw a surge. Beauty brands like Nykaa, in the second quarter of FY25 (July-October period), clocked “mid-twenties” revenue growth, according to its regulatory filing. Mamaearth, on the other hand, saw a five-fold growth during the Meesho sale period (pre-Diwali sale).
Fashion and beauty GenZ portfolio grew 175% YoY on Amazon during festive sales. There was also a 400% spike in premium categories like watches, fragrances, K-beauty, and sportswear, especially popular among younger, smaller-city consumers.
Home decor, lighting, and kitchen gadgets also contributed to the sales with Amazon recording more than 60% new customers from tier 2-3 cities. Flipkart, too, saw 2X growth in sales during the event.
The report by Datum showed growth in sales versus its estimates, reflecting that overall sales increased in all segments except in fashion, as calculated.
Quick Commerce: The New Hero of Last-minute Shopping
Quick commerce has changed the game for “Need it right now” purchases. The sector has grown from a grocery-only solution to a full-fledged alternative for everyday essentials, festive needs, and even fashion accessories.
Quick Commerce Players in the Market
The platform is rapidly scaling up to meet consumer demand with a market value estimated at $3.34 billion in 2024 and projected to hit $9.95 billion by 2029, according to Chryseum Report, a financial services firm.
Zomato-backed Blinkit, Zepto, and Swiggy Instamart are setting up dark stores—essentially mini-warehouses close to dense customer bases, enabling them to achieve ultra-fast delivery times and broaden their reach, including Tier 2 and 3 cities.
Looking at the trajectory, the Chryseum Report also highlighted that from FY23 to FY24, quick commerce experienced a 73% growth rate, five times higher than e-commerce’s 14% growth rate. That said, the quick commerce market in India currently exhibits a penetration rate of only 7% of the potential market, which was poised to increase to 8% during the festive season.
What makes them a go-to for last-minute festive shopping? Fast delivery, discounts, ease of ordering, and online payment remain the critical drivers for quick commerce platforms.
For cooking needs during this time, these players stocked essentials like dry fruits, sweets, and snacks, ensuring families had fresh ingredients on demand.
Not just that, they have diversified into beauty products, tech gadgets, and fashion accessories, making it easy to grab last-minute lipstick or Diwali bangles, and even gold and silver coins during Dhanteras.
Even decor items kept up with the demand during this time, and some are now gearing up for Christmas with holiday-specific products too.
So, what does this rapid growth mean for investors?
Both e-commerce and quick commerce are experiencing structural shifts, influenced by rising digital adoption, consumer demand for convenience, and expanding product offerings. If you are looking to invest in such sectors of growth, here are some key insights:
E-commerce Potential: The high sales volumes and strong consumer response across multiple categories indicate the resilience and growth potential of the e-commerce sector. Long-term investors might consider investing in portfolios focusing on digital retail transformation. The Digital Inclusion smallcase could be an option for investors looking to capture the broader growth of the digital economy, including retail and digital payments.
FMCG and Quick Commerce Growth: Quick commerce is seeing incredible momentum, particularly in FMCG and last-minute convenience items (e.g., groceries and daily essentials). Investors interested in this shift can explore the FMCG Tracker smallcase, which targets companies at the forefront of fast-moving consumer goods—a sector that quick commerce is now transforming with instant delivery options.
Consumer Technology and Premiumisation: Both e-commerce and quick commerce saw increased demand for high-value items, especially electronics, beauty, and fashion. This points to a trend of premiumisation, where consumers are opting for better quality and branded products. Investors looking to capitalise on this can explore thematic portfolios like Brand Value smallcase, focusing on companies that lead in consumer electronics, tech accessories, and premium goods, which are becoming a major part of online spending.
Disclosures for all smallcases mentioned above
To wrap it up
With rising participation from Tier 2 and 3 cities, the future looks promising for both models. While e-commerce remains the heavyweight for larger, well-planned purchases, quick commerce has become almost indispensable for immediate, smaller items consumers want quickly.
Ultimately, both e-commerce and quick commerce have found a place in the Indian shopping experience, with each catering to different consumer needs—and with the success of both this festive season, it’s clear that the market is big enough for both models to thrive.
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