India's online retail market to cross $90 bn in 2026; grocery to overtake mobiles: Redseer

India's online retail market is projected to cross $90 billion in 2026, registering an annual growth of 22-24%, its fastest expansion in five years, driven by everyday consumption categories like grocery rather than mobile phones, Redseer Strategy Consultants said in a report.

According to the analysis, e-commerce gross merchandise value (GMV) expanded roughly 25% year-on-year to about $38 billion in the first half (H1) of 2026, marking its strongest H1 performance in four years.

While online retail accelerated, mobile sales remained flat at 0% growth during the first half and are projected to grow by just 2-3% across the full year due to sharp price increases curbing sales volumes.

Consequently, the grocery segment is poised to overtake mobile phones as the second-largest category in Indian e-commerce, behind fashion.

"This year, India's online retail is growing fastest where demand is steadiest," said Kushal Bhatnagar, Partner at Redseer.

The report noted that grocery, beauty and personal care (BPC), and home and furniture will account for about 40% of overall online retail GMV in 2026 and roughly three-fifths of the incremental GMV added during the year.

Grocery to overtake mobiles

Grocery alone is projected to account for nearly a third of the added GMV, expanding 50-53% for the full year and lifting its market share from 16% in 2025 to 19% in 2026. Mobiles, which accounted for around 19% of total sales last year, are expected to see their market share drop to roughly 16%.

BPC is projected to rise 36-39%, while home and furniture is estimated to expand 31-34% in 2026.

In contrast, electronics experienced a 22% rebound in H1 2026 after contracting 5% in the corresponding period of 2025. Redseer attributed this spike to "pre-loaded" demand, spurred by the reduction of goods and services tax (GST) on large appliances from 28% to 18% in September 2025, heavy discounting on air conditioners due to changes in Bureau of Energy Efficiency (BEE) star ratings, an LPG shortage driving a 200–300% surge in induction cooktops, and early laptop purchases ahead of expected component price increases.

Growth in the electronics segment is expected to normalise to 12-15% in the second half (H2).

For the 30-35-day window leading up to Diwali, online sales are forecast to expand about 25% year-on-year to reach $15-16 billion, representing the strongest festive growth in five years.

"Redseer expects the pre-festive momentum in grocery, BPC, home and furniture, and general merchandise to carry over into it. Grocery is projected to grow 48-50%, BPC 35-40%, and home and furniture 32-35%, against 5-7% for mobiles.

"Redseer projects that mobiles and electronics together will fall below half of festive GMV this year, from 51% to 46% by our calculation, owing to sharp price hikes that will keep volumes subdued," the report added.