India’s online retail market is projected to cross $90 billion in 2026, growing 22-24% year-on-year, with grocery, beauty and personal care, and home and furniture driving the fastest expansion, according to Redseer.
New Delhi, October 20 — India’s online retail market is expected to cross $90 billion in 2026, expanding at an annual rate of 22-24%, its fastest growth in five years, according to a report by Redseer Strategy Consultants.
The report said e-commerce gross merchandise value (GMV) rose about 25% year-on-year to nearly $38 billion in the first half of 2026, marking the strongest first-half performance in four years.
The growth mix, however, is changing significantly. Mobile phone sales remained flat during the first half and are expected to grow only 2-3% for the full year, largely because higher prices are weighing on volumes.
As a result, grocery is projected to overtake mobile phones as the second-largest category in Indian e-commerce, behind fashion.
Redseer expects grocery, beauty and personal care, and home and furniture to account for around 40% of total online retail GMV in 2026 and nearly three-fifths of the incremental GMV added during the year.
Grocery alone is expected to contribute nearly a third of the incremental GMV and grow 50-53% in 2026.
Its share of the online retail market is projected to rise from 16% in 2025 to 19% in 2026.
In contrast, mobile phones, which accounted for around 19% of online sales last year, are expected to see their share decline to about 16%.
The beauty and personal care segment is expected to grow 36-39%, while home and furniture could expand 31-34% during the year.
Electronics also rebounded strongly in the first half, growing 22%, compared with a 5% decline in the same period of 2025.
Redseer attributed this to several factors, including a GST cut on large appliances from 28% to 18% in September 2025, heavy discounting on air conditioners linked to changes in BEE star ratings, a sharp increase in induction cooktop demand during an LPG shortage, and early laptop purchases ahead of expected component price increases.
Electronics growth is expected to moderate to 12-15% in the second half.
For the 30-35 days before Diwali, online sales are projected to rise around 25% year-on-year to $15-16 billion, which would mark the strongest festive growth in five years.
During the festive period, grocery is expected to grow 48-50%, beauty and personal care 35-40%, and home and furniture 32-35%, while mobile sales are expected to grow only 5-7%.
Redseer said mobiles and electronics together are expected to account for 46% of festive GMV, down from 51% earlier, reflecting the broader shift towards everyday consumption categories.
