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How Smaller Cities Power India's Online Diwali Shopping Boom

Smaller cities are driving India's online Diwali shopping boom with remarkable force. Tier 3 towns alone account for over half of all e-commerce orders during the festive season. Despite the massive volume increase, logistics networks maintained efficient delivery times across the country. This shift confirms that non-metro India has become the undisputed engine of e-commerce growth.

Key Points: Tier 3 Cities Drive 75% of Online Diwali Shopping Volume

  • Tier 3 cities contributed over 50% of all festive e-commerce orders nationwide
  • Fashion orders surged 14.3% during Durga Puja week celebrations
  • Average delivery time remained steady at 2.83 days despite volume surge
  • Cash on delivery dominated Tier 3 cities with 52% payment preference
2 min read

Smaller cities propel online Diwali shopping boom

Smaller cities dominate festive e-commerce with 75% of Diwali orders. Tier 3 towns lead growth as logistics maintain 2.83-day delivery average amid surging demand.

"The scale of non-metro India is staggering. Tier 3 cities alone accounted for 50.7 per cent of all orders in 2025. - ClickPost"

New Delhi, Oct 19

The online Diwali shopping boom this year has been powered by smaller non-metro cities, which account for close to 75 per cent of total e-commerce volumes, according to data compiled by an intelligence platform.

The spending power of smaller cities is further evident from the fact that tier 3 towns contributed over 50 per cent to the surge in consumer expenditure. Data analysis of over 4.25 crore shipments by ClickPost shows that these smaller cities now represent the fastest growth drivers of festive e-commerce.

"The scale of non-metro India is staggering. Tier 3 cities alone accounted for 50.7 per cent of all orders in 2025. Combined with Tier 2 (24.8 per cent), Bharat represents nearly three-quarters (74.7 per cent) of the total order volume, confirming its role as the undisputed engine of e-commerce scale," according to a ClickPost statement.

Festive demand was further boosted by Durga Puja, which saw fashion orders surge by 14.3 per cent during the pre-Puja week and Karwa Chauth, when cosmetic buys nearly doubled fashion purchases.

Despite the complexity and volume increase, India's logistics networks maintained a steady average delivery time of 2.83 days for festive shipments. The share of same-day hyperlocal deliveries surged 42 per cent year-on-year to reach 8.7 per cent of all orders.

Cash on delivery remained the preferred method in Tier 3 cities, comprising 52 per cent of orders, even as prepaid digital payments dominated higher-value transactions nationwide.

The average order value jumped 32.5 per cent year-over-year (from Rs 3,281 in 2024 to Rs 4,346 in 2025).

"We're entering a new era of Indian retail; one where Tier 3 towns out-order metros, where COD still rules the heartland, yet prepaid dominates the premium basket; where home-upgrades, not just outfits, power festive spend. What that means is, investments in speed, fulfilment, inventory intelligence and localised offers are absolutely foundational. The smart players are already preparing for next year's curve: same-day-blueprint in hundreds of towns, tailored assortments, and delivery models built for both 1 lakh orders and 1 minute gratification," ClickPost co-founder and CEO Naman Vijay said.

ClickPost handles over 50 million monthly shipments for over 450 brands such as Nykaa, Puma, Caratlane, and Walmart across India, Southeast Asia, MENA, and the US.

- IANS

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Reader Comments

R
Rohit P
Finally our tier-3 cities are getting the recognition they deserve! The spending power has always been here, just needed better access. COD option is a lifesaver for many who are still hesitant about digital payments.
A
Ananya R
While the growth is impressive, I hope companies don't forget about quality. Some of my orders had issues with product quality and returns process was complicated. Need better customer service along with faster delivery.
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Sarah B
As someone who moved from Delhi to Dehradun, I've seen first-hand how e-commerce has transformed shopping in smaller cities. The variety available now is incredible and delivery times have improved dramatically.
V
Vikram M
The 32.5% jump in average order value shows people are spending more confidently online. From my experience in Lucknow, people are buying everything from electronics to home decor for festivals now. Digital India is truly happening!
K
Kavya N
Same-day delivery growing by 42% is the real game changer! In our city, we got Diwali decorations and gifts delivered within hours. This convenience is what's driving more people to shop online. 👏

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