GST cuts push festive e-commerce sales higher
Bullish sentiment, fuelled by GST-enabled price reductions pushed festive demand by 23-25%
image for illustrative purpose
New Delhi: Consumer behaviour this season reflects a bullish sentiment, fuelled by GST-enabled price reductions that have lowered costs in high-ticket categories such as electronics and pushed festive demand up 23-25 per cent across metropolitan and emerging markets.
The GST reforms, effective from September 22 -- the first day of Navratri --reduced tax rates in several high-demand categories, including large-screen TVs, mid-range fashion and furniture, providing direct price benefits to consumers. These changes have not only lowered retail prices but also encouraged shoppers to look beyond tactical discount-hunting towards more aspirational purchases, lifting participation from tier 2 and tier 3 cities and stimulating growth in discretionary spending.
According to market research firm Redseer, the reduction of GST on large TVs from 28 to 18 per cent led to a 6-8 per cent fall in retail prices, boosting demand for premium models.
Fashion items priced below Rs 2,500 now attract just 5 per cent GST, encouraging mid-market apparel purchases, while furniture, now also taxed at 5 per cent, has shifted from wishlists to shopping carts. "First 2 days sales surged by 23-25 per cent year-on-year, marking a four-to-fivefold jump in growth over last year's muted start. The twin forces of GST 2.0 reforms and festive sentiment powered a wave of premium smartphone and TV purchases, with loyalty members driving record demand.
"For the first time in years, India's festive e-commerce season is not just about deals it's about policy shifts, consumer confidence, and platforms vying to capture the premium basket.
"User feedback suggested that demand was so strong that some apps even faced massive slowness and crashed within minutes of trying to place orders, suggesting positive sentiment of users to spend and grab flash deals and early-bird discounts," Redseer said.
E-commerce major Amazon reported over 38 crore customer visits in the first two days of its festive sale, marking its biggest-ever seasonal start, with more than 70 per cent of traffic coming from outside the top nine metros.
