Even as traditional high-street markets appear bustling during the festive season, a significant share of retail activity has firmly shifted from brick-and-mortar stores to online platforms. Recent estimates indicate that the country's online retail market is projected to cross the USD 90 billion mark, translating to over eight lakh crore rupees, by the end of this year. A recent report published by Redseer Strategy Consultants points out that India's digital retail sector is on track to exceed USD 90 billion, registering a rapid annual growth rate of 22 to 24 percent, which marks the fastest pace seen in five years.
Shift toward everyday essentials over mobile phones
The primary driver behind this robust expansion is the surging demand for everyday essentials such as groceries rather than traditional high-ticket items like mobile phones. E-commerce gross merchandise value or GMV surged by nearly 25 percent year-on-year during the first half of 2026, reaching USD 8 billion, which represents the strongest semi-annual performance recorded in four years.
Flat growth expected in smartphone sales
While digital retail continues its upward trajectory, mobile phone sales are expected to remain relatively flat during the period. Due to sharp price hikes that have constrained sales volumes, handset sales are projected to grow by a modest 2 to 3 percent for the entire year.
Fashion and grocery lead the demand
Amidst sluggish mobile sales, the grocery sector is poised to surpass mobile phones and emerge as the second-largest category in Indian e-commerce right after fashion. Online purchases of groceries, beauty and personal care known as BPC, along with home decor and furniture, are expected to account for roughly 40 percent of the total online retail GMV in 2026. The festive season has kicked off on a strong note for digital commerce platforms. Citing data from Sensor Tower, a Bank of America report noted that daily active users on Flipkart touched record levels on the very first day of its Big Billion Days sale.
Surge in tier-2 and tier-3 buyers
This shopping season witnessed a massive influx of shoppers from non-metro areas and first-time users across all major platforms. New customer additions on Flipkart grew by 34 percent, with non-metro regions accounting for nearly 60 percent of the total demand. In the fashion segment, Myntra continues to hold its position as the largest platform, with its monthly active users growing by eight percent year-on-year in September to reach approximately 9.3 crore. Nykaa Fashion saw a 24 percent increase in users to about 1.7 crore, while the core Nykaa platform remained the most active beauty and personal care destination with roughly two crore users.
Expansion of quick commerce platforms
The report added that quick commerce and food delivery continued their structural expansion, though daily-use categories witnessed very modest festive spikes. In September, Blinkit saw its user base expand by 53 percent year-on-year to touch nearly 5.8 crore. During the first six days of festive sales, average daily users rose by three percent over September levels, while Zepto experienced a marginal two percent decline. Usage on these platforms typically spikes around specific occasions such as Raksha Bandhan and Valentine's Day.
