High Tide In Low Water

Contrary to the expected post-DeMo/GST slump, the Diwali season has shown considerable sales growth

- Arindam Mukherjee

Diwali and festive months have always been good for industry. During this time, markets see maximum growth in the year. But this year, things have been bigger than expectations for most retailers who have seen a bumper harvest despite the disturbances caused by demonetisation and GST.

According to RedSeer Consulting, e-commerce companies saw 45-50 per cent growth in September-October this year over last year. It said that e-tailers achieved highest-ever monthly sales over the course of the festive period of September 20 and October 19.

With demonetisation and GST setting in, many quarters were expecting that consumer sales and purchases would dip in the festive months. However, companies actually saw a significant surge in sales during these months.

To some extent this was pushed by a 20 per cent increase in spends during Diwali compared to the previous quarter, according to Walnut, a company that looks at the personal finance and payments space. According Walnut’s data, Delhi, Pune and Mumbai showed the highest spends among top metros during the Diwali season.

“In the last 12 months there was a lot of upheaval in the system with demonetisation and GST. But for us the number of customers and transactions has more than doubled in this festive period,” says Radhika Aggarwal, co-founder, Shopclues, India’s third largest e-commerce company. “The number of orders has doubled on a daily basis and during Diwali season our orders have grown up to three times.”

According to RedSeer estimates for this year’s festive season, e-commerce companies generated a total of $ 3.2 billion or Rs. 19,000 crore of sales for the 30-day festive period between September 20 and October 19 2017. This was 45 per cent higher than the festive month of October 2016, when companies had generated $2.2 billion in sales.