E-commerce may corner up to half of festive ad spends

India’s festive season has always been a litmus test for consumer sentiment, and 2025 is shaping up to be one of the most dynamic yet. Industry estimates suggest that e-commerce could account for anywhere between a quarter and half of the total festive ad spends in 2025, making it the single largest advertising vertical during this high-stakes quarter.

Industry projections indicate double-digit ad spend increases year-on-year on e-commerce platforms—ranging from 10% to as high as 27%—fuelled by rising discretionary purchases, deeper penetration in Tier-2 and Tier-3 cities, and the spending power of Gen Z.

Anil Solanki, Senior Director, Media Lead at Dentsu X, told exchange4media that e-commerce ad spends are expected to rise by 15–20% this festive season compared to last year. He attributes this growth to stronger consumer sentiment, post-election stability, a buoyant stock market, and the fact that Diwali is falling mid-October this year, giving platforms a longer festive sales window.

“Another big factor is that more regional and mid-tier brands are using e-commerce marketplaces aggressively, which is pushing ad spends beyond just the top players,” Solanki added. 

He further noted that categories like fashion, beauty, electronics, and grocery are expected to lead the charge, with brands competing heavily for share of voice during the festive sales surge.

As brands and marketplaces set the tone for the upcoming festive season, early indicators point to strong momentum. Festive 2024 GMV reached $14 billion, growing 12% YoY, according to a Redseer report. Growth came from quick commerce, electronics, fashion, and BPC, with Tier-2 cities and rising per-shopper spends fueling momentum. Smaller cities also recorded the fastest spend growth at 13%, aided by discounts and prepaid transactions.

Sanket Savaliya, Senior Brand Manager at MGID is even more bullish, forecasting a 27% jump, highlighting the role of Gen Z in driving purchase decisions. “We’re seeing e-commerce drive close to 35–40% of total digital festive ad spends this year, up from previous years,” he noted, pointing out how quick commerce and real-time intent-driven campaigns are expanding opportunities.

While estimates vary, the consensus is clear: e-commerce is set to dominate festive advertising, commanding anywhere from a quarter to nearly half of all ad spends this season.

Add to this the surge in categories like quick commerce, beauty, personal care, and consumer durables, and it’s clear why festive advertising is no longer just about visibility, but precision-led conversion at scale.

Marketers, meanwhile, are leaning on AI-driven personalization, performance marketing, programmatic dominance, and creator-led commerce to cut through the clutter. With Connected TV, regional content, and immersive ad formats shaping discovery, the festive window is evolving from a single advertising spike to a series of micro-moments spread across weeks of celebration. The opportunity is enormous—but so is the competition. In 2025, the brands that balance scale with personalization, and storytelling with measurable impact, will be the ones to truly own the festive season, say experts.

Programmatic lens

Platforms are also investing heavily in logistics and fulfillment to sustain demand spikes. As Chandramouli Nilakantan, CEO of TRA Research explained, “Greater adoption of AI-driven personalization and the shift toward ROI-focused media strategies are compelling e-commerce players to invest heavily in performance and precision marketing.”

From a channel perspective, the tilt toward digital is sharper than ever. Programmatic and native formats account for nearly 50% of digital budgets, with social commanding another 30%, according to Savailya. This is complemented by short, high-impact offline campaigns in metro markets.

E-commerce brands are directing the bulk of festive budgets to digital, with Trackier noting 50–60% of spend flowing into programmatic display and video, and another 25–30% into social platforms like Instagram, Facebook, and TikTok. Offline channels capture only 15–20%, largely for awareness or local reach. 

The new festive playbook is not about choosing between digital and traditional but integrating them. Nikhil Kumar, Chief Growth Officer at mediasmart explained, “The conversation has shifted from ‘where is my audience spending time’ to ‘who is my audience and how do I reach them with relevance at every touchpoint.’ Programmatic underpins much of the digital delivery, with CTV rising as the unifying force.”

Kumar further highlighted that budgets are flowing toward performance, with about half of campaigns CPI/CPA-driven and another 20% focused on retargeting. Brands are doubling down on ROI-led tactics, leveraging AI-driven bidding and automation. Trackier’s performance-first platform is enabling this data-backed focus, underpinning expectations of double-digit festive ad growth.

Brands perspective

For brands, marketplaces have evolved from being just distribution channels to full-fledged marketing ecosystems. Shankar Ramm, MD of Peps Industries, allocates 10% of his festive marketing budget to e-commerce platforms, citing their ability to deliver scale and precision. “During festivals like Diwali, when online traffic surges due to discounts and exclusive deals, we can connect with millions of shoppers who might not visit a physical store,” he said.

This highlights a critical shift: even traditionally offline categories like mattresses now view e-commerce as indispensable for festive outreach.

Jatin Kapoor, MD of Adsflourish said, “Shoppers today are not just waiting for offline deals; they are actively scouting e-commerce platforms weeks in advance. With Big Billion Days and Great Indian Festival setting the tone, brands are witnessing up to 3–5X growth in ad spends and conversions during this period.”

According to him, consumers are also buying across new categories—beyond electronics and fashion, there’s a sharp spike in D2C brands, beauty, FMCG, and consumer durables.

Even for other industries such as incense and fragrance - e-commerce demands at least 10% of the total share. 

“The e-commerce websites organize yearly festive offers, and the potential they hold cannot be ignored,” said Nidhi Sabbarwal, Founder, Kalyanamm Holy Waste Pvt. Ltd. She added that Amazon, Flipkart, and others allow them to sell to Indian customers anywhere in the country. Their behavior-based marketing also ensures that wellness, spirituality, and sustainability products find their right audience.

“Festive shopping in India is increasingly digital, discovery-led, and intent-driven. Our plan reflects that reality—meeting consumers where they browse, compare, and convert in the same moment,” said Kiran Ranga, Director at IRIS Home Fragrances. “We’re leaning into platforms that blend scale with precision, and partnerships that create excitement and exclusivity for gift-givers.”

Kapoor underscores another emerging dynamic. “Festive months now contribute nearly 35–40% of annual digital spends for several categories. For publishers, CPMs shoot up by 30–50%, and premium ad slots are sold out weeks in advance.”

What’s fueling the growth?

Several structural factors are aligning to drive this surge, according to Nilakantan. First, festive sales are expected to cross ₹1.2 lakh crore, making advertising a non-negotiable lever for growth. Second, digital-first consumer journeys are now mainstream—over 80% of shoppers research online before purchasing, and more than 60% plan to complete their purchases digitally.

Kumar added, “Consumer optimism continues to ride a high wave, with shoppers showing a greater appetite for big-ticket discretionary purchases, encouraging brands to step up their media investments. The festive calendar itself has also expanded, with multiple sale events spread across weeks, which means sustained advertising outlay rather than a single burst.”

According to him, platform innovation—from new retail media formats on marketplaces to creator-led commerce on social platforms—is giving e-commerce brands more avenues than ever to engage consumers and drive demand.

The momentum is no longer restricted to metros. Senthil Kumar Hariram, Founder & Managing Director, FTA Global, points out that growth will be “faster in Tier II/III cities, expanding the accessible market.” He expects this to be fueled by creator-led formats, social commerce, and flexible payment innovations like BNPL.

The Playbook for 2025 and Beyond

The festive quarter of 2025 is not just about big budgets; it’s about smart allocation and sustained engagement. The convergence of AI-driven personalization, creator-led commerce, and omnichannel journeys is reshaping festive advertising into a multi-week, multi-format race for consumer attention.

As Hariram puts it, “Exclusive launches, flash sales, and partner promotions require bigger media spends,” but the ultimate differentiator lies in how brands convert awareness into loyalty beyond the festive window.

If one theme emerges clearly from industry voices, it is this: scale without precision is wasteful, and precision without scale is invisible. The winners of 2025 will be the brands that strike the right balance, marrying aggressive festive offers with meaningful customer experiences that endure long after the last firecracker fades.

“2025 festive season is expected to be the biggest yet, with e-commerce GMV projected to cross USD 12–15 billion in just the 1–2 month window. The brands that will win are the ones that marry aggressive festive offers with sustainable customer experience, ensuring retention long after the celebrations are over,” Kapoor concluded.