Home appliances leave behind smartphones in festive sales on back of GST cut, says Amazon India

This year, e-commerce platforms are among the biggest beneficiaries of the GST rate cuts announced earlier this month. In an interaction with Fortune India, Amazon India vice-president Saurabh Srivastava highlighted a notable shift in consumer behaviour this festive season. Unlike previous years when smartphones dominated festive sales, non-smartphone categories have recorded stronger growth this time.

This shift is also because the smartphone category itself has matured and reached a saturation point, making the timing of the GST relief on other home appliances all the more impactful. Earlier this month, the GST Council had reduced GST rates on several consumer electronics, bringing rates on air conditioners, dishwashers, TVs, monitors, projectors and electric accumulators down from 28% to 18%.

“Smartphones weren’t affected much by GST rate cuts. That’s because smartphones are already a very large and relatively mature category in India, with industry growth at about 2–3%,” adds Srivastav.

Srivastava, however, adds that while other categories are growing faster in percentage terms, smartphones continue to be Amazon India’s strongest segment in volumes, owing to their large base. The category also benefits from wider exchange and Easy Monthly Instalment (EMI) options, which are more prevalent and attractive for smartphone buyers than for most other products.

“So even without GST benefits, strong deals, EMI, exchange, and card offers are keeping smartphones a top-performing category. Smartphone remains one of the largest categories when it comes to overall size. And it has good growth. The categories where there is a GST, especially large appliances and television, then the growth rate is higher than the smartphone,” he says.

Yet, with consumer electronics seeing faster growth, the GST reduction gives e-commerce platforms a chance to broaden their focus beyond smartphones, which have historically defined their festive sales.