India’s online retail market to cross $90 billion in 2026, grocery to overtake mobiles: Redseer

Grocery, beauty and personal care, and home and furniture are emerging as the biggest growth drivers of India’s online retail market, which is projected to surpass $90 billion in 2026, expanding 22-24% year-on-year, according to a report by Redseer Strategy Consultants.

The market is on track to record its fastest annual growth in five years, with demand shifting towards everyday consumption categories even as mobile phone sales remain subdued. Grocery is expected to overtake mobiles to become the second-largest category in online retail, behind fashion.

India’s 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 report said.


"This year, India's online retail is growing fastest where demand is steadiest," said Kushal Bhatnagar, Partner at Redseer.

Grocery is projected to grow 50-53% over the full year, increasing its share of online retail GMV from 16% in 2025 to 19% in 2026. The category is expected to contribute nearly a third of the additional GMV generated this year.

In contrast, mobile phone sales recorded zero growth in the first half of 2026. Growth for the category is forecast at just 2-3% for the full year, as steep price increases weigh on sales volumes. Mobiles accounted for about 19% of online retail sales in 2025, but their share is expected to fall to around 16% this year.

Grocery, beauty and personal care (BPC), and home and furniture are expected to account for about 40% of total online retail GMV in 2026 and contribute roughly three-fifths of the incremental GMV added during the year.

BPC is projected to expand 36-39%, while home and furniture is expected to grow 31-34%, reflecting the rising contribution of non-electronics categories to e-commerce growth.

Electronics rebound may ease in second half

Electronics sales rebounded 22% year-on-year in the first half of 2026, reversing a 5% contraction in the corresponding period last year. However, Redseer expects growth to moderate to 12-15% in the second half as the factors behind the initial surge ease.

The report attributed the first-half recovery to several factors, including a reduction in the goods and services tax on large appliances from 28% to 18% in September 2025, aggressive air-conditioner discounts following changes in Bureau of Energy Efficiency star ratings, and a shortage of liquefied petroleum gas (LPG) that drove a 200-300% surge in induction cooktop sales.

Early laptop purchases ahead of expected component price increases also contributed to the rebound. Redseer described some of this demand as "pre-loaded", suggesting that purchases had been brought forward rather than reflecting a sustained acceleration in demand.

Festive online sales projected to hit $15-16 billion

Online retail sales during the 30-35 days leading up to Diwali are forecast to grow about 25% year-on-year to $15-16 billion, marking the strongest festive-season growth in five years, according to the report.

Redseer expects grocery, BPC, home and furniture, and general merchandise to sustain their momentum during the festive period. Grocery sales are projected to rise 48-50%, BPC 35-40%, and home and furniture 32-35%, compared with just 5-7% growth for mobiles.

"Redseer expects the pre-festive momentum in grocery, BPC, home and furniture, and general merchandise to carry over into it. Grocery is projected to grow 48-50 per cent, BPC 35-40 per cent, and home and furniture 32-35 cent, against 5-7 cent for mobiles.

"Redseer projects that mobiles and electronics together will fall below half of festive GMV this year, from 51 cent to 46 cent by our calculation, owing to sharp price hikes that will keep volumes subdued," the report added.

Mobiles and electronics together are expected to account for 46% of festive-season GMV, down from 51% previously, according to Redseer's estimates. The shift underlines how higher product prices and subdued volumes are reshaping online shopping, with everyday essentials and home-related categories taking a larger share of consumer spending.