Diwali Festive Season Insights: E-Commerce Surge, Consumer Shifts, and Offline Retail Challenges

The festive season brought mixed outcomes for India’s retail landscape, underscoring the significant shifts in consumer preferences and shopping behaviours. With e-commerce platforms seeing record sales, an unprecedented rise in UPI transactions, and quick commerce emerging as a new player, it’s clear that digital-first strategies are reshaping the market. Meanwhile, offline retailers faced mounting competition from the convenience of online channels, revealing both opportunities and challenges ahead.

?? Key Festive Trends Across Retail Channels

1. E-Commerce Sales Break Records India’s e-commerce platforms saw a remarkable growth of over 20% compared to last year, reaching Rs 1 lakh crore (~$11.9 billion) in sales. This surge was largely driven by strong demand from non-metro regions, where consumers showed a growing appetite for luxury and premium brands. #ECommerceGrowth #RetailInnovation
2. UPI Transactions Hit New Highs October witnessed a substantial increase in digital payments, with UPI transactions surpassing 16.58 billion—up 45% from last year. Transaction values soared to Rs 23.5 lakh crore, highlighting the growing shift toward digital payments across India. #DigitalPayments #Fintech
3. Quick Commerce Boom The quick commerce segment, known for fast delivery on essentials, generated between $1.1-1.2 billion during the festive period. Much of this demand came from spontaneous, last-minute purchases, especially in the season's final week. #QuickCommerce #RetailTrends
4. Offline Retail Faces Competition Offline retail performed half at Online Sales level with the Confederation of All India Traders (CAIT) estimating a Diwali spend of Rs 4.25 lakh crore. However, many traditional stores faced increased competition from online discounts and quick delivery services. Retailers in categories like fashion, home decor, and groceries shared concerns about reduced foot traffic and competition on margins. #BrickAndMortar #RetailChallenges
5. D2C Brands Experience Explosive Growth India’s direct-to-consumer (D2C) brands recorded unprecedented growth, with some experiencing up to 700% year-on-year increases. Categories such as beauty, footwear, apparel, and luggage led the way, reflecting consumer interest in niche and premium products. #D2C #ConsumerBrands

?? Changing Consumer Demand in Non-Metro Markets

Non-metro areas played a pivotal role this season, with over 85% of Amazon’s customer base and substantial sales growth from Flipkart vendors indicating a shifting focus toward smaller cities. Smartphones, groceries, beauty, and personal care items topped the charts, while premium and mid-premium smartphones saw strong demand due to advanced AI-driven features. #RuralMarketing #ConsumerBehavior

?? Offline Retail Faces Challenges Amid E-Commerce Growth

This Diwali, the rapid rise of e-commerce presented a unique challenge for physical retailers.?

At Wansa, where we focus on growth and go-to-market strategies, we observed this shift firsthand. Some of our clients in premium retail segments across Delhi NCR experienced a 35% drop in foot traffic during the Diwali period, impacting their in-store promotions and sales.

One of the retail partners of Wansa, a lifestyle store in Bangalore noted, "Over 30% of our business has been impacted by e-commerce this season." Another Wansa ‘s grocery and gift store partner in Gurgaon shared, "It’s tough to compete with online marketplaces offering steep discounts, and quick commerce has intensified these pressures." Lower footfall in stores further impacted results, with some premium retail stores in Delhi NCR experiencing a 35% drop in consumer visits.

Even in typically high-traffic categories like electronics, fashion, and kitchen appliances, footfall lagged behind expectations. Quick-commerce platforms like Zepto, Swiggy, and Blinkit drew customers away from physical stores for items like brooms and other essentials, signaling a shift toward the convenience of instant delivery. #RetailInsights #ShoppingTrends

?? Key Takeaways for Retailers and Brands

This season’s insights highlight the dynamic shifts in India’s retail landscape. The continued growth of online shopping and digital payments is reshaping how and where consumers make purchases, with premium and local D2C brands gaining traction across both metro and non-metro markets. Retailers must adapt to these trends to capture evolving demand, particularly by exploring omnichannel strategies, enhancing customer experiences, and leveraging digital platforms for a competitive edge.

The festive season has provided a glimpse into the future of retail in India, with e-commerce and quick commerce playing increasingly influential roles. Adapting to these shifts will be key for both traditional retailers and emerging brands as they navigate the evolving landscape.

#FestiveShopping #RetailTrends #EcommerceIndia #DigitalTransformation #ConsumerInsights #RetailStrategy