India's online retail market is projected to cross $90 billion in 2026, registering an annual growth of 22-24 per cent, its fastest expansion in five years, driven by everyday consumption categories like grocery rather than mobile phones, Redseer Strategy Consultants said in a report.
According to the analysis, e-commerce gross merchandise value (GMV) expanded roughly 25 per cent year-on-year to about $38 billion in the first half (H1) of 2026, marking its strongest H1 performance in four years.
While online retail accelerated, mobile sales remained flat at 0 per cent growth during the first half and are projected to grow by just 2-3 per cent across the full year due to sharp price increases curbing sales volumes.
Consequently, the grocery segment is poised to overtake mobile phones as the second-largest category in Indian ecommerce, behind fashion.
"This year, India's online retail is growing fastest where demand is steadiest," said Kushal Bhatnagar, Partner at Redseer.
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The report noted that grocery, beauty and personal care (BPC), and home and furniture will account for about 40 per cent of overall online retail GMV in 2026 and roughly three-fifths of the incremental GMV added during the year.
Grocery alone is projected to account for nearly a third of the added GMV, expanding 50-53 per cent for the full year and lifting its market share from 16 per cent in 2025 to 19 per cent in 2026. Mobiles, which accounted for around 19 per cent of total sales last year, are expected to see their market share drop to roughly 16 per cent.
BPC is projected to rise 36-39 per cent, while home and furniture is estimated to expand 31-34 per cent in 2026.
In contrast, electronics experienced a 22 per cent rebound in H1 2026 after contracting 5 per cent in the corresponding period of 2025. Redseer attributed this spike to "pre-loaded" demand, spurred by the reduction of goods and services tax (GST) on large appliances from 28 per cent to 18 per cent in September 2025, heavy discounting on air conditioners due to changes in Bureau of Energy Efficiency (BEE) star ratings, an LPG shortage driving a 200300 per cent surge in induction cooktops, and early laptop purchases ahead of expected component price increases.
Growth in the electronics segment is expected to normalise to 12-15 per cent in the second half (H2).
For the 30-35-day window leading up to Diwali, online sales are forecast to expand about 25 per cent year-on-year to reach $15-16 billion, representing the strongest festive growth in five years.
"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.
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