India’s online retail heads for $90 billion as quick commerce eyes 20% of festive spend

India’s online festive shopping is set for its strongest growth in five years, but the bigger change may be happening beneath the headline numbers. Quick commerce is emerging as a significant part of the festive shopping basket and could account for nearly one-fifth of online retail sales during the season, according to Redseer Strategy Consultants.

Redseer expects India’s online retail market to cross $90 billion in CY2026, growing 22-24% year-on-year, after expanding by around 25% in the first half of the year. During the festive period, online retail is projected to grow 25%, up sharply from 16% in 2025 and the highest growth rate in roughly five years.

The acceleration, however, will not be evenly spread across categories. Grocery is expected to grow 48-50% during the festive season, followed by home and furniture at 32-35%, beauty and personal care at 35-40%, and fashion at 20-22%. Mobiles, which accounted for 33% of festive online retail in 2025, are expected to grow only 5-7%, while electronics could expand 15-17%.

“The expected festive momentum is likely to come from quick commerce & value commerce, which continue to outperform despite a large base, and everyday categories,” said Kushal Bhatnagar, partner, Redseer Strategy Consultants.

Quick commerce could account for nearly one-fifth of festive online retail this year, after its market size roughly doubled for three consecutive years in the first half. Bhatnagar said this represents “a meaningful change in the composition of online spending.”

The channel has already reached a scale large enough to influence the broader e-commerce market. Quick commerce touched approximately $9 billion in H1CY26, while monthly transacting users increased from 8 million at the end of H1CY23 to more than 60 million in H1CY26.

What is changing is also what consumers are buying. While grocery and essentials are increasingly moving from offline to online, quick-commerce platforms are creating new consumption occasions around products such as energy drinks, packaged coconut water, dark chocolate and premium impulse snacks.

During the festive season, quick commerce sales are projected to surge 110-120% year-on-year, compared with 16-18% growth for the rest of e-commerce. Mobiles and electronics could also make up 14-15% of quick-commerce sales during the period, nearly twice their usual 7-8% share, as platforms expand rapid delivery beyond everyday purchases.

The demand base is widening too. Tier 2+ markets outpaced metros in fashion and BPC growth, excluding quick commerce, during H1CY26, supported by regional assortments, vernacular campaigns and greater access to newer brands. Gen Z now accounts for 38-40% of online retail users and 35% of GMV, compared with 20% and 10%, respectively, in CY22.

Redseer expects online retail penetration in India to rise from around 8% in CY2025 to 15-17% by CY31, with the channel projected to grow at a 20-24% CAGR over the period.