This year, festive sales are expected to push up the annual gross merchandise value of e-commerce companies to around $38 billion, a 40 per cent growth over the previous year.
The measures announced by the Centre to stimulate consumer spending and capital expenditure will come as a boon for e-commerce and omnichannel retail companies, said industry executives and analysts.
These booster doses include leave travel concession (LTC), a cash voucher as well as a festival advance scheme.
The plans would enable government as well as private sector employees to use their LTC tax-free benefits for myriad purchases.
Additionally, there is an interest-free festival advance of Rs 10,000 being given to government employees.
“The decisions taken by the finance minister are a big step in giving a fillip to consumer demand in India,” said Rajneesh Kumar, chief corporate affairs officer at e-commerce major Flipkart.
“The announcement of the LTC cash voucher and festival advance scheme will help propel latent demand in the economy,” he added.
Kumar said e-commerce has been at the forefront of addressing this latent demand.
He added that the government’s decision to give more money to consumers through the digital mode will boost online buying.
According to him, this would help both MSMEs and sellers.
“We at Flipkart welcome the government’s decision and will continue to support the economy by addressing consumer needs, creating jobs and income streams for businesses through our partnerships and programmes,” said Kumar.
The Covid-19 pandemic has accelerated the shift towards e-commerce, as more consumers are shopping online.
This year, festive sales are expected to push up the annual gross merchandise value (GMV) of e-commerce companies to around $38 billion, a 40 per cent growth over the previous year, according to research firm RedSeer Consulting.
The e-commerce sector’s festive sales could alone surpass the $7-billion mark.
Ankur Pahwa, partner and national leader, e-commerce and consumer internet, at consultancy EY India, said the upcoming festive season will play a key role in the revival of businesses.
“Customer sentiment is slowly bouncing back with positive indicators, especially in the online space.
“The recently-announced initiatives by the finance minister will spur consumption by infusing liquidity in the hands of the public, which will benefit both offline and online players,” added Pahwa.
Other industry executives said these schemes of the government are practical if consumers do digital transactions.
This would lead to growth in the collection of Goods and Services Tax (GST).
While India e-commerce is booming, the retail sector is steadily recovering post ‘Unlock’ to reach over 80 per cent of pre-Covid levels.
This is about $780 billion in 2020, according to RedSeer.
“The retail industry has pinned their hopes on festive shopping to recover from the immense loss of business caused due to the pandemic,” said Kumar Rajagopalan, chief executive of Retailers Association of India.