Grocery set to overtake phones in India's $90 billion online shopping market

Picture your phone's shopping app. A year ago, the thing people spent the most on, after clothes, was a new phone. This year, it is set to be groceries: the atta, milk and vegetables you need every week.

That is the big finding from a report by Redseer Strategy Consultants, shared on 20 October 2026. It says grocery is set to overtake mobiles as the second largest category in Indian online shopping. Only fashion stays ahead of it.

The same report says India's whole online retail market will cross $90 billion in 2026, growing 22 to 24% in a year. That is its fastest growth in five years.

First, what is online retail?

Online retail simply means shops on the internet that sell things to people like you and your family. Think of apps where you order a T-shirt, a face wash, a phone or a packet of chips.

Redseer measures it with something called GMV, short for gross merchandise value. GMV is the total price of everything sold, before taking out discounts, returns or costs.

Here is an easy way to see it. Say a samosa stall sells 100 samosas at Rs 20 each. Its GMV for the day is Rs 2,000. That number tells you how big the stall's sales are. It does not tell you how much profit the stall owner kept.

A big number counting up to 90 billion dollars beside rising bars, for India's online shopping in 2026 — India's online shopping is expected to cross $90 billion in 2026.

How big is the jump this year?

In the first half of 2026, from January to June, India's online GMV rose about 25% to nearly $38 billion. Redseer called it the strongest first half in four years.

If the full year crosses $90 billion, that means more than $50 billion of shopping is still expected in the second half, from July to December. That half includes the big festive sales before Diwali.

Kushal Bhatnagar, a partner at Redseer, summed up the shift in one line: "This year, India's online retail is growing fastest where demand is steadiest."

Steady demand means things people need every week, not once in three years. You may buy a new phone only once in a long while. But you buy milk, bread and soap again and again.

Why groceries are racing ahead

Redseer expects online grocery sales to grow 50 to 53% over the full year. That is like a stall that sold 100 packets last year selling about 150 this year.

Grocery's share of all online shopping is set to rise from 16% in 2025 to 19% in 2026. Share means its slice of the whole pie. If all online shopping were a pizza cut into 100 small slices, grocery would get 19 of them this year.

Grocery alone is expected to bring in nearly a third of all the extra GMV added this year. So out of every three new rupees spent online, about one is going on groceries.

Two panels: in 2025 phones had 19% and grocery 16% of online sales; in 2026 grocery is expected at 19% and phones about 16% — Grocery and phones swap places on the list.

So what happened to phones?

Phone sales online did not grow at all in the first half of 2026. Growth was 0%. For the full year, Redseer expects only 2 to 3% growth.

The reason, as per the report, is sharp price hikes. When phones cost a lot more, fewer people buy them.

Phones made up about 19% of online sales in 2025. In 2026, their share is expected to fall to around 16%. In simple words, grocery and phones are swapping places.

The other winners: beauty and home

Grocery is not alone. Redseer groups three everyday categories together: grocery, beauty and personal care (things like shampoo, face wash and lipstick), and home and furniture.

Together, these three are expected to make up about 40% of all online GMV in 2026. They are also set to bring in roughly three fifths of the extra GMV added this year. That is about three out of every five new rupees.

Beauty and personal care is expected to grow 36 to 39%. Home and furniture is expected to grow 31 to 34%.

Wait, gadgets also jumped. Why?

Here is a twist. Electronics, like ACs, fridges and laptops, grew 22% in the first half of 2026. In the same months of 2025, this category had shrunk by 5%.

Redseer gave four reasons for the bounce, and they are listed in the Fortune India report:

GST, the tax added to what you buy, on large appliances was cut from 28% to 18% in September 2025.
Air conditioners got big discounts after changes in Bureau of Energy Efficiency star ratings, the stars that show how much power an AC uses.
A shortage of LPG, the cooking gas in cylinders, pushed induction cooktop sales up by 200 to 300%.
Some people bought laptops early, before expected price rises for parts.

Four cards light up one by one: GST cut from 28% to 18%, AC discounts, induction cooktops up 200 to 300%, laptops bought early — Four reasons gadget sales jumped in early 2026.

Redseer called some of this demand "pre-loaded". That means people bought earlier than they normally would. It is like eating your Diwali sweets in September. You still eat the same sweets, just sooner, so there are fewer left for later.

That is why Redseer expects electronics growth to slow down to 12 to 15% in the second half of the year.

What about the Diwali sales?

Festive sales are the time when shopping apps run their biggest offers. Redseer looked at the 30 to 35 days before Diwali.

Online sales in this window are expected to grow about 25% to $15 to 16 billion. That would be the strongest festive growth in five years.

The same pattern shows up here too:

Grocery: expected to grow 48 to 50%
Beauty and personal care: 35 to 40%
Home and furniture: 32 to 35%
Mobiles: only 5 to 7%

Mobiles and electronics together are expected to fall below half of festive GMV this year, from 51% to 46%, because high prices will keep the number of units sold low.

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Why this matters to you

For years, festive sales in India were mostly about phones and gadgets. This report shows that habit is changing. Indians are now using shopping apps for daily needs, not just for big, once in a while buys.

The numbers also show how repeat buying adds up. A phone is bought once in a long while. Groceries are bought every week, so even small orders, placed again and again, can grow into the second biggest slice of the whole market.

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Sources

You may republish this story under CC BY 4.0: credit Manpreet Kaur and link to this page.