India’s online festive sales are expected to grow in 2026, but shoppers may find fewer deep discounts as rising product costs, higher freight expenses and the absence of last year’s GST-driven price reductions limit how much retailers can cut prices. E-commerce sales during the festive season are projected to reach ₹1.5 lakh crore to ₹1.55 lakh crore, representing growth of 25% to 29%, according to estimates cited by Financial Express. However, the growth is increasingly expected to come from higher sales volumes and purchases of more affordable products rather than aggressive price reductions.
The shift comes as brands and online marketplaces prepare for major shopping events around Dussehra and Diwali. While consumers continue to look for attractive deals on smartphones, laptops, home appliances, fashion and personal care products, average selling prices across several major online categories are higher than they were during last October’s festive sales. Retailers must balance customer demand for bargains against rising procurement and operating costs, making the traditional strategy of offering large discounts for extended periods more difficult to sustain.
India’s Festive E-Commerce Sales May Reach ₹1.55 Lakh Crore
India’s festive shopping season remains a major opportunity for online marketplaces, consumer brands and retailers. Platforms such as Amazon India, Flipkart, Reliance’s JioMart and quick-commerce services are competing for customer spending across electronics, fashion, beauty, home products and everyday essentials.
Estimates cited by Financial Express indicate that online festive sales could grow 25% to 29% this year, reaching ₹1.5 lakh crore to ₹1.55 lakh crore. Yet this growth may look different from previous years, when aggressive discounts and tax-related price reductions played a major role in encouraging purchases.
According to the report, Flipkart’s festive item sales are projected to increase 34%, compared with 20% growth in sales value. If those estimates materialize, the difference would indicate that the platform is selling more individual items relative to the increase in the value of purchases, consistent with a shift toward lower-priced products.
The distinction between sales volume and sales value is important. Higher order volumes do not necessarily translate into proportionately higher revenue when consumers choose cheaper products or retailers offer fewer premium purchases.
Product Prices Are Higher Than Last Year
Average selling prices across seven major e-commerce categories tracked by data firm 1digitalstack.ai were above their October 2025 festive-sale levels, according to Financial Express.
| Product category | Increase in average selling price |
|---|---|
| Laptops | 41% |
| Footwear | 13.5% |
| Air conditioners | 11% |
| Smartphones | 10% |
| Clothing | 5% |
| Washing machines | 4% |
| Beauty and personal care | 4% |
Source: Financial Express, citing 1digitalstack.ai. The figures compare average selling prices with last October’s festive-sale levels and do not necessarily represent price increases for every individual product.
Laptops recorded the largest increase among the categories tracked, while smartphone prices were approximately 10% higher. Higher prices can make consumers more dependent on bank offers, exchange bonuses and instalment payments to afford purchases.
The increase in selling prices also reduces the scope for retailers to advertise substantial discounts against existing prices without putting additional pressure on their margins. Retailers may instead focus on selected models, limited-time offers or financing packages that lower the immediate cost to consumers.
For customers, this means the best deal may not necessarily involve the largest reduction in the advertised price. Cashback, exchange value, financing costs and bundled accessories can all affect the effective purchase price.
Why Retailers Have Less Room to Offer Deep Discounts
Several factors are squeezing the discount budgets of retailers and manufacturers.
Rising input and operating costs
Manufacturers are dealing with higher costs for components, raw materials, packaging, transportation and other operating expenses. Currency movements can also increase the cost of imported components and finished products.
Consumer electronics manufacturers have already announced price increases across several product categories in 2026. Air conditioners, for example, have faced expected price increases of around 5% to 8%, while selected washing machines, refrigerators and televisions have also become more expensive.
These pressures can affect the entire supply chain. Manufacturers may pass some costs to distributors, while retailers must decide how much of the increase to absorb and how much to pass on to customers.
No comparable GST price-cut boost
Last year, GST reductions helped lower prices in categories such as air conditioners, washing machines, footwear and clothing. This year, retailers do not have an equivalent tax-related reduction to support the same kind of price cuts.
The absence of that tailwind makes it harder for sellers to replicate last year’s pricing conditions, particularly when other costs are moving in the opposite direction.
Pressure on retailer margins
Retailers must pay for inventory, logistics, customer acquisition and promotional campaigns. Deep discounts can generate more orders, but they can also leave less profit on each sale.
As a result, brands and platforms are expected to concentrate their strongest offers on selected products and limited periods rather than maintain the deepest discounts throughout the festive season. The Economic Times reported that some electronics, smartphone and consumer-goods companies planned to offer peak discounts during the first three to four days of the sale before reducing them.
Smartphones Face a Particularly Difficult Festive Season
Smartphones are among the most important categories for online festive sales, but rising prices and pressure on household budgets are creating challenges for the segment.
Datum expects festive smartphone sales to grow by only 6% this year, compared with 26% growth last year, according to Financial Express. Higher average selling prices and limited consumer spending power are contributing to the slower outlook.
The pressure is especially significant in the more affordable segment, where even relatively small price increases can influence purchase decisions. Some consumers may delay upgrading their existing phones, choose lower-priced models or buy older-generation devices instead of paying more for newer products.
Retailers and brands are responding with offers that reduce the upfront financial burden without requiring equally large reductions in the listed price.
These include:
- No-cost EMI and longer instalment periods.
- Instant cashback on selected bank cards.
- Exchange bonuses for customers trading in older devices.
- Assured buyback programmes and bundled accessories.
- Discounts restricted to selected models or limited quantities.
Business Standard has reported that smartphone brands and retailers are increasingly relying on cashback, exchange offers and financing as alternatives to straightforward price cuts.
The strategy may help support sales, but it also makes comparing offers more complicated. Consumers need to consider eligibility conditions, processing fees, exchange valuations and the total amount payable over the financing period.
Consumers May Shift Toward Affordable Products
The changing discount environment could reshape how households distribute their festive budgets.
Financial Express cited estimates suggesting that the average online shopping basket could decline by 1.5%, even as overall festive sales grow. The report also put median planned consumer spending at around ₹12,500, approximately ₹300 above the previous year. These estimates suggest that overall spending could remain resilient while individual purchases become more selective.
Consumers may buy more lower-priced products, spread purchases across several orders or prioritize essential upgrades over discretionary spending. Some buyers may also opt for refurbished electronics or extend the replacement cycle for products that remain functional.
However, consumer behavior is not uniform across income groups or product categories. Buyers who can access attractive financing may continue purchasing premium smartphones and electronics, while more price-sensitive households may postpone purchases or move to cheaper alternatives.
This could create a two-speed festive market: relatively strong demand in premium categories alongside greater pressure on entry-level products.
What the Discount Squeeze Means for E-Commerce Platforms
For online marketplaces, the challenge is to sustain order growth without relying entirely on price reductions. Platforms may need to use targeted promotions, advertising, loyalty benefits, payment partnerships and product recommendations to attract customers.
The economics of festive sales also depend on how much of a discount is funded by the manufacturer, the marketplace, the bank or another partner. An advertised offer may combine several incentives rather than reflect a direct reduction in the retailer’s selling price.
Retailers are also likely to pay closer attention to inventory management. Holding excessive stock can create additional costs, while running out of popular products can result in missed sales. Limited-time promotions and more selective discounting can help sellers manage inventory, although the effectiveness of this approach will depend on demand forecasts and supplier commitments.
For smaller brands, promotional costs can be particularly challenging. Quick-commerce platforms have also seen higher advertising rates squeeze the budgets available for festive discounts, according to Moneycontrol.
The Bigger Picture
India’s festive e-commerce market may continue growing even as the nature of discounts changes. Higher prices do not automatically prevent consumers from shopping, but they can encourage buyers to choose cheaper products, use financing or delay purchases that are not urgent.
The expected increase in sales volume alongside a slower rise in sales value in some estimates highlights the difference between selling more products and generating proportionately more revenue. For retailers and brands, the priority is increasingly to deliver value while protecting margins, rather than competing solely through the size and duration of advertised discounts.
Looking Ahead
The coming weeks will show whether online marketplaces can achieve their festive sales targets with smaller discount windows and a greater emphasis on affordability. Smartphone demand, appliance purchases and the performance of lower-priced product categories will be important indicators. Actual sales could differ from current forecasts depending on consumer confidence, inventory availability and the attractiveness of financing offers.
For consumers, comparing the final payable price will matter more than focusing only on headline discount percentages. Bank cashback, exchange bonuses and no-cost EMI can make purchases more affordable, but eligibility requirements and additional charges should be checked carefully. For retailers, the key challenge will be to convert festive traffic into sustainable sales without allowing promotional costs to erode profitability.
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