65% of festive orders came from tier 2–3 cities: Report

India’s festive-season e-commerce growth was shaped more by operational efficiency than discount-led spikes this year, according to Fynd’s 'Festive Season Report 2025.' The unified commerce platform, backed by Reliance Retail Ventures Limited, detailed how rising Tier 3 demand, omnichannel fulfilment, and value-focused purchasing are reshaping the country’s retail landscape.

The report, based on insights from more than 60 brands across major marketplaces including Myntra, Flipkart, Amazon, AJIO, Nykaa and Tata CLiQ, captures performance trends across apparel, footwear and fashion accessories during the September–October festive cycle. With national e-commerce penetration projected to exceed 11% of total retail sales in 2025, the findings point to a market increasingly defined by accessibility and convenience rather than promotional intensity.

Fynd’s data shows that Tier 2 and 3 markets accounted for 65% of festive orders, with Tier 3 alone contributing 46%. Delhi, Maharashtra and Uttar Pradesh led in order volumes, while Gujarat recorded steady upward movement. Southern states — particularly Karnataka, with strong contributions from Bengaluru and Hyderabad — played a significant role in both demand and fulfilment, and also led digital payment adoption. Overall, digital payments made up 53% of festive transactions, while cash-on-delivery remained a preferred mode in smaller cities.

Footwear posted one of the strongest category surges, rising from 7% to 33% of festive-season sales. Market activity continued to be dominated by Myntra and Flipkart, which together accounted for 89% of order volumes. Discounts also stabilised, falling from an average of 44% in 2024 to 34% in 2025, signalling marketplace efforts to balance profitability with competitive pricing.

Operational improvements emerged as a defining theme. Returns and RTOs saw notable reductions, with Amazon cutting returns to 8% and RTOs to 2%. Store-based fulfilment reached 51%, matching warehouse fulfilment for the first time and reducing an estimated 4% of potential sales loss by improving cross-location routing.

“India’s e-commerce story is unfolding on its own terms—built on speed, proximity, and precision. This festive season proved that the real levers of growth are operational, not promotional—stores doubling as micro-warehouses, networks placing inventory closer to demand, disciplined pricing anchored in everyday value, and trust-driven payments,” said Farooq Adam, Co-founder, Fynd. “The brands that will win from here won't chase discounts; they’ll design for India’s regional realities, serve rising demand from smaller cities with faster fulfillment, and build prepaid trust. That is the uniquely Indian model of profitable and resilient scale we’re creating.”

The report situates India within a broader global pattern of cautious consumer spending, but notes the country’s distinctive combination of value-seeking behaviour, rapid digital adoption and regional diversity. According to Fynd, the next phase of growth in Indian e-commerce will hinge on omnichannel readiness, operational agility and sharper consumer segmentation as the market shifts from festival-led peaks to consistent year-round performance.