Ecommerce Sales Growth May Slow to 10-15% as Costs Rise and Discounts Shrink

Rising raw-material, packaging and fuel costs are expected to put pressure on India’s ecommerce sector during its mid-year promotional season, with online sales growth likely to slow compared with last year. Amazon and Flipkart have already launched their Independence Day sale events, but industry executives and analysts expect a more cautious discounting environment as companies grapple with higher operating costs and weaker festival support.

Online sales volumes during the Independence Day promotional period are expected to grow by around 10-15% this year, significantly below the approximately 20% growth recorded last year. The comparison is particularly challenging because Independence Day and Raksha Bandhan fell close together in 2025, creating an extended shopping and gifting window.

This year, the timing is less favourable for ecommerce platforms. Raksha Bandhan falls on August 28, nearly two weeks after the current Independence Day sales are expected to conclude. The absence of the festival during the main promotional period means platforms are unlikely to receive the same boost from gifting demand that they experienced last year.

Amazon and Flipkart launched their Independence Day sales last Friday as part of their efforts to capture consumer spending ahead of the festive season. However, the companies are entering the promotional period at a time when input costs are rising across several categories.

Raw-material costs have increased by around 10-40%, depending on the product category, while packaging and fuel expenses are also being affected by broader inflation and geopolitical uncertainty. Higher costs are putting pressure on sellers and brands, making it more difficult for them to offer the deep discounts that have become a defining feature of major ecommerce sales.

Industry observers expect discounting to be more selective this year. Instead of relying heavily on large headline discounts, ecommerce platforms are likely to use financial incentives such as zero-cost EMI schemes, bank offers and cashback deals to encourage customers to complete purchases.

Ashish Dhir, senior director for consumer and retail at market intelligence firm 1Lattice, said discounts of 30%, 50% or 60% that were commonly seen during earlier sales events are unlikely to be as widespread this year.

The change could be particularly noticeable in categories where input costs have risen sharply. Electronics, appliances, furniture, fashion and other consumer products can face significant increases in raw-material, logistics or packaging expenses, limiting the ability of brands and sellers to absorb additional discounts.

For ecommerce platforms, the challenge is to maintain consumer interest without sacrificing seller margins. Deep discounts can generate higher order volumes, but they can also make the economics of promotional events increasingly difficult when costs are already elevated.

The platforms may therefore focus on perceived value rather than simply displaying large percentage discounts. Bank partnerships, credit-card promotions, cashback, exchange offers and EMI schemes can reduce the effective price for consumers while allowing sellers to maintain a higher listed selling price.

The shift could also change the way shoppers evaluate ecommerce sales. Consumers may need to compare the final price after bank offers, cashback and payment incentives rather than relying solely on headline discount percentages.

The weaker festival overlap is another important factor. Raksha Bandhan is traditionally an important gifting occasion, particularly for categories such as smartphones, electronics, fashion, beauty products and personal accessories. With the festival occurring later this year, some of that demand could shift toward the second half of August rather than being captured during the Independence Day sales.

This creates the possibility of two separate demand peaks rather than one combined promotional period.

Quick-commerce platforms are also preparing for a major Raksha Bandhan demand surge. Industry estimates suggest that Raksha Bandhan could generate around 14-15 million orders in a single day for quick-commerce companies, compared with approximately 8-9 million orders a year earlier. The expected increase highlights the growing importance of instant delivery for festival gifting.

The contrast between ecommerce and quick commerce could become more pronounced during the festival season. Traditional ecommerce platforms are likely to focus on higher-value purchases such as electronics, appliances and fashion, while quick-commerce companies can capture last-minute gifting, sweets, flowers, personal-care products and other convenience-led purchases.

The broader inflationary environment remains a concern for both categories. Higher fuel prices increase transportation costs, while packaging inflation affects almost every physical product shipped to consumers.

Geopolitical uncertainty can further complicate supply chains by affecting energy prices, freight rates and the availability or cost of imported components and materials.

For sellers, the combination of higher input costs and slower volume growth creates a difficult operating environment. If consumers become more price-sensitive, sellers may have limited ability to pass the entire increase in costs on to buyers.

This could result in greater competition for consumer spending during the sales period. Brands may prioritise products with stronger margins, while marketplaces could give greater visibility to categories where promotional economics remain attractive.

The 10-15% expected growth in online sales volumes nevertheless indicates that consumers are still likely to spend during the promotional season. The issue is that the growth rate may be significantly lower than the previous year’s unusually strong performance.

The comparison with last year is also affected by the broader festive calendar. When Independence Day and Raksha Bandhan occurred close together, consumers had additional reasons to shop during the same promotional period. This year, the separation between the two events means ecommerce platforms have less opportunity to combine patriotic promotions with festival gifting.

The outcome could make this year’s Independence Day sales a more accurate indicator of underlying consumer demand. If platforms manage to deliver 10-15% volume growth despite higher prices and weaker festival support, it would suggest that online consumption remains relatively resilient.

However, a slowdown in sales growth could also indicate that consumers are becoming more cautious as inflation affects household budgets.

For Amazon and Flipkart, the promotional strategy will therefore be about balancing volume, discounts and profitability. Aggressive price cuts may generate orders but could worsen margins, while conservative discounts could protect profitability but reduce customer engagement.

The use of zero-cost EMI and bank offers provides a middle path. These mechanisms can encourage consumers to spend without requiring sellers to reduce the sticker price by the same amount.

The trend also reflects the changing economics of India’s ecommerce market. During the industry’s earlier growth phase, platforms frequently used deep discounts to acquire customers and increase order volumes. As the market matures and profitability becomes more important, companies are increasingly focusing on sustainable unit economics.

The current cost environment could accelerate that transition.

For consumers, this year’s Independence Day sales may therefore feel different from previous mega-sale events. Shoppers could see fewer extremely large headline discounts but more targeted offers tied to payment methods, financing, exchanges and specific products.

The broader industry impact is that India’s ecommerce sector is entering the festive season with a greater emphasis on profitability and cost control. Expected sales-volume growth of 10-15% remains healthy, but it is well below last year’s 20% growth, while raw-material costs have risen by 10-40% across categories.

The combination could push marketplaces and brands away from blanket discounting toward targeted promotions. It may also encourage consumers to shop more selectively and compare offers across platforms rather than assuming that every major sale represents a deep price cut.

With Raksha Bandhan arriving later in August, the next major test will be whether gifting demand creates a second boost for ecommerce and quick-commerce platforms. If festival demand remains strong despite higher costs, companies could still deliver a solid overall season even if the Independence Day sales themselves grow more slowly.

For India’s ecommerce industry, this year’s promotional period is therefore less about record-breaking discounts and more about finding a sustainable balance between consumer demand, competitive pricing and rising costs.