Diwali is still a day away, but India’s shopping carts are already full. Online festive sales in the run-up to the festival are on course to touch $16 billion, roughly Rs 1.4 lakh crore, according to fresh estimates from consultancy Redseer Strategy Consultants reported this week. That is a jump of about 25 percent over last year, and the fastest festive growth India has seen in five years.
The numbers tell a simple story. This Diwali, the action is not only in the big metros. It is in the smaller towns, on phones, and in everyday categories like groceries and home goods, which are growing far faster than the phones and gadgets that once dominated online festive sales.
Small towns are driving the boom
One of the clearest shifts this season is where the money is coming from. Payment data from Pine Labs shows transaction value in tier III markets grew 50 percent during the festive period, compared with 30 percent in the metros. Card transactions in these smaller markets rose 35 percent, against just 5 percent in the big cities.
UPI is the engine behind much of this. UPI transaction volumes jumped 91 percent and values rose 95 percent, according to the same data, and the average UPI payment in tier III towns was actually higher than in the metros, at Rs 1,500 against Rs 1,229. For millions of first-time festive shoppers in smaller towns, the phone has become the mall.
The early days of the sale season set the tone. Redseer put the first two days of festive e-commerce at Rs 24,200 crore in gross merchandise value across Amazon, Flipkart, Meesho and Ajio, with 8 to 9 crore orders placed by 6 to 6.5 crore shoppers. Two-thirds of that demand came from tier II cities and rural India.
Groceries and home goods take the lead
The other big change this year is what people are buying. Grocery is set to overtake mobiles as the second-largest online category in India, and the festive numbers show why. Redseer expects grocery sales to grow 48 to 50 percent this festive season, beauty and personal care 35 to 40 percent, and home and furniture 32 to 35 percent.
Mobiles, by contrast, are expected to grow just 5 to 7 percent. Higher prices have kept buyers cautious, and mobiles and electronics together are set to fall below half of festive online sales for the first time, slipping from 51 percent to 46 percent of the total.
A $90 billion year for online retail
The festive surge sits inside a much bigger year for Indian e-commerce. Redseer expects India’s overall online retail market to cross $90 billion in 2026, growing 22 to 24 percent over the year, also its fastest annual expansion in five years. Online retail sales reached around $38 billion in the first half of 2026 alone, up about 25 percent from the same period last year.
The picture across platforms is consistent: Indians are spending more online, and on planned purchases, travel and everyday essentials rather than only on big-ticket gadgets.
What to watch as Diwali arrives
- Delivery pressure: With crores of orders already placed, delivery timelines in smaller towns will be the real test of this season’s logistics.
- Last-minute buying: Dhanteras and the days just before Diwali typically bring a final rush, especially for gold, jewellery and gifts.
- Everyday categories: Grocery, beauty and home goods are the growth story this year, so expect platforms to push offers hardest there.
- Small-town spending: Tier II and III markets are now the growth engine. How much they spend after Diwali will shape the rest of the year’s retail numbers.
Diwali falls on November 8 this year, and the festive shopping window has been running for 30 to 35 days. If the current pace holds, this will go down as the strongest festive season Indian e-commerce has seen in half a decade, and the clearest sign yet that online shopping in India is no longer a metro story.
FAQs
How much will Indians spend online this Diwali?
Online festive sales are expected to reach $15 to 16 billion, about Rs 1.4 lakh crore, up roughly 25 percent from last year, according to Redseer Strategy Consultants.
When is Diwali 2026?
Diwali falls on November 8, 2026. The festive online shopping window covers the 30 to 35 days leading up to the festival.
Which categories are growing fastest this festive season?
Grocery leads at 48 to 50 percent growth, followed by beauty and personal care at 35 to 40 percent and home and furniture at 32 to 35 percent. Mobiles are growing just 5 to 7 percent.
Are smaller towns spending more than metros?
Yes. Transaction value in tier III markets grew 50 percent against 30 percent in metros, and two-thirds of early festive orders came from tier II cities and rural India.
How big is India’s online retail market in 2026?
Redseer expects it to cross $90 billion in 2026, growing 22 to 24 percent over the year, its fastest annual growth in five years.
Stay with Informeia for more updates on festive shopping, markets and the stories shaping India this Diwali.
