Grocery, beauty and personal care, and home and furniture are expected to drive 22-24 per cent growth in 2026, while higher prices weigh on mobile sales
India’s online retail market is projected to cross USD 90 billion in 2026, growing 22-24 per cent year-on-year as grocery, beauty and personal care (BPC), and home and furniture emerge as the biggest contributors to ecommerce expansion. The market is expected to record its fastest annual growth in five years, with consumer spending shifting towards everyday essentials even as mobile phone sales remain subdued.
According to a report by Redseer Strategy Consultants, the changing demand pattern is expected to push grocery ahead of mobile phones to become the second-largest category in online retail, behind fashion. India’s online retail gross merchandise value (GMV) grew around 25 per cent year-on-year to nearly USD 38 billion in the first half of 2026, marking the strongest first-half performance in four years, the report said.
“This year, India’s online retail is growing fastest where demand is steadiest,” said Kushal Bhatnagar, Partner at Redseer.
Grocery Leads Online Retail Growth
Grocery sales are projected to grow 50-53 per cent over the full year, increasing the category’s share of online retail GMV to 19 per cent from 16 per cent in 2025. The segment is expected to account for nearly one-third of the additional GMV generated in 2026.
Mobile phones, in contrast, recorded no growth in the first half of the year. Sales in the category are forecast to increase by just 2-3 per cent for the full year as higher prices weigh on demand. Mobiles accounted for around 19 per cent of online retail sales in 2025, but their share is expected to decline to approximately 16 per cent in 2026.
BPC is projected to grow 36-39 per cent this year, while home and furniture sales are expected to rise 31-34 per cent. Together with grocery, these categories are forecast to account for around 40 per cent of online retail GMV and contribute roughly three-fifths of the additional GMV generated during the year.
Electronics Recovery Faces Festive-Season Test
Electronics sales rebounded 22 per cent year-on-year in the first half of 2026, recovering from a 5 per cent contraction in the corresponding period last year. However, Redseer expects growth to moderate to 12-15 per cent in the second half as some of the factors behind the recovery ease.
The report attributed the first-half rebound partly to a reduction in the goods and services tax (GST) on large appliances from 28 per cent to 18 per cent in September 2025. Discounts on air conditioners following changes in Bureau of Energy Efficiency star-rating requirements also supported sales. A shortage of liquefied petroleum gas (LPG) drove a 200-300 per cent increase in induction cooktop sales, while consumers advanced laptop purchases ahead of anticipated component price increases.
Redseer described some of the electronics demand as “pre-loaded”, indicating that purchases had been brought forward rather than reflecting a sustained increase in underlying demand.
Festive Online Sales Seen At $15-16 Billion
Online retail sales during the 30-35 days preceding Diwali are projected to reach $15-16 billion, up around 25 per cent year-on-year. This would mark the strongest festive-season growth in five years, according to the report.
Grocery sales during the period are expected to rise 48-50 per cent, while BPC is projected to grow 35-40 per cent and home and furniture 32-35 per cent. Mobile sales, by comparison, are forecast to increase by just 5-7 per cent.
Mobiles and electronics together are expected to account for 46 per cent of festive-season GMV, down from 51 per cent previously, according to Redseer’s estimates. The declining share points to a shift in online spending towards grocery, personal care and home-related products, even as higher prices continue to constrain demand for electronics.
