The GST rationalisation, which promises noticeable savings for customers and an additional boost for platforms already preparing for record demand, has taken effect just as e-commerce companies are getting ready for their busiest time of the year. The timing of the move was perfect for Amazon, Flipkart, Meesho and even quick-commerce companies like Instamart.
The industry is in a prime position to profit from the holiday season, which is expected to be the strongest in years. Big businesses have timed their marquee promotions to coincide with the new tax rates in the hope that consumers will relax their spending when they see the price tags reflect the savings. This week marks the launch of Flipkart’s Big Billion Days and Amazon’s Great Indian Festival, while Meesho has already begun its Mega Blockbuster Sale. Over the weekend, Swiggy’s quick-commerce division, Instamart, launched its Quick India Movement sale.
The alignment is intentional. For weeks, platforms have been getting ready, working with companies to adjust MRPs, updating systems with updated GST codes and redesigning seller interfaces. The objective is to ensure that every penny of tax benefit is distributed without any problems. To keep ahead of spikes in demand, inventory flows have been adjusted, compliance audits have been strengthened and sellers have been prodded.
Logistics networks are expanding behind the scenes. Amazon has tripled its dedicated B2B fulfilment capacity in Bengaluru, Delhi and Mumbai, allowing its sellers to get goods up to 50% faster. With ambitions to increase its micro-fulfilment centres by the end of the year, the business is also making significant investments in Amazon Now, its q-commerce vertical.
Flipkart is relying on Minutes, its in-house q-commerce platform, to handle the holiday traffic. In Tier-2+ areas like Ambala, Guwahati, Jaipur, Lucknow, Kanpur and Patna, Flipkart Minutes, which covers 19 towns and 3,000 pin codes, wants to become the go-to app during the holiday season.
To encourage customers, Myntra has introduced a GST Benefit Included sticker on a number of items, including clothing and cookware. This extra clarification can be a deciding factor for holiday customers who consider every discount.
According to Pradyumnā Nag, Founder and CEO of Prequate Advisory, “Giants have already started stocking up with new MRPs and are absorbing the cost differences to avoid stock-outs or losing customers due to supply chain constraints and the coinciding festival season.” E-commerce behemoths prepare weeks in advance, which gives them an advantage in coordinating tax benefits with holiday stocking, in contrast to quick commerce companies, which usually only store a few days of inventory.
Analysts in the industry are already optimistic. Redseer predicts that e-commerce sales will surpass Rs 1.15 lakh crore (US $ 13.04 billion) in gross merchandise value in the 30 to 35 days preceding Diwali, representing a 20–25% annual growth. That pace may be the best in the previous five years and is almost double of last year. For expensive goods like appliances, the timing of the GST cuts is anticipated to cause a double demand wave, first during the immediate holiday rush and then again later in the year.
