E-commerce giants’ annual Indian sales events are also a festival of utterly meaningless metrics

Measured in buildings.
Measured in buildings.
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Like the past many years, the festive season in India has begun with massive online sales, blinding marketing blitzkrieg, eye-popping discounts—and meaningless metrics.

On Sept. 29, Flipkart, India’s largest homegrown e-commerce brand (now owned by Walmart), said in a press release that it had registered “2X sales growth” on the first day of its flagship festive season sale, Big Billion Days (BBD). While a two-times growth sounds impressive, the catch is that the company has not disclosed the actual sales figures for last year’s BBD. So, whether the 2X is on a base of Rs1 crore or Rs100 crore is anybody’s guess.

There were many other “X”s in the same release from Flipkart that were listed without any context:

  • 3X transaction growth during early access (from Flipkart Plus Customers) as compared to 2018
  • Customers opting for affordability options spent 2.5X more than other customers
  • Travel is the fastest-growing category on Flipkart, ahead of vertical players, with 12X growth over last year
  • Within laptops, key segments like gaming and thin & light laptops exceeded 2X over last year, leading to overall growth of over 10% in the average selling price
  • Electronics grew over 70% from tier 2+ cities, with a 100% increase in women shoppers from smaller towns
  • The share of consumers picking premium smartphones rose 97%

Arch rival Amazon India, too, offered several such vague details of its Great India Festival:

  • Large appliances, TVs saw record sales over 36 hours with nearly 10X growth over an average business day.
  • Fashion grew 5X while India’s largest beauty store on saw around 7X jump in sales
  • Groceries grew 3.5X over an average business day

Flipkart and Amazon did not respond to emails seeking clarification on these figures.

“I believe this is part of their brand-building and influencing customers on the areas they want more sales. By saying more people are buying these things from us in this category, they are trying to tell consumers to shop that category,” said Harish HV, an independent tech analyst. “Of course, this does not give any sense on the value and volume as growth in terms of multiples can be a lot if there is a high base and meaningless if the category had very low sales.”

Today (Oct. 04) is the last day of Amazon and Flipkart’s sales, and if precedent is anything to go by, there will be many more metrics shared by next week, which will most likely go from vague to absurd.

Burj Khalifa and football stadium

Not only do Amazon India and Flipkart refrain from sharing real revenue figures during their annual festive sales, they often resort to absurd analogies to trumpet their brands. Instead of rupees or percentages, larger-than-life imagery is often deployed: buildings, mountains, stadiums.

Last year, the over-828-metres Burj Khalifa, the world’s tallest building, was a favourite. Here’s what Amazon India had said about its five-day sale that ended on Oct. 15, 2018:

If all the Lego Bricks bought from Amazon India during Great Indian Festival were stacked, the tower so formed would be taller than Burj Khalifa.

Meanwhile, Flipkart in its report card for BBD that ended on Oct. 14, 2018, said:

Length of mobile cables sold (was) 100x the height of Burj Khalifa.

There were comparisons also to the length of Airbus A380s, the height of elephants, Eiffel Tower, Mount Everest, and Empire State Building, the size of cricket stadiums, and trips around the earth.

“To be fair to these firms some amount of hyperbole is needed to reach the right audience. Given these are high growth industries they have to find and are trying to define their own terminologies that is way outside the traditional metrics of businesses,” said Yugal Joshi, vice-president at Texas-based consultancy Everest Group. “Moreover, given these aren’t listed firms and are not required by law to provide any statistics, they want to be cautious not to give out too much information about their business.”

The devil in the numbers

To be fair, there have been times when Amazon India and Flipkart have tried to share the exact sales figure, but these numbers often ended up painting an incomplete picture.

For instance, in the Sept. 29 release, Amazon India said “premium smartphone brands OnePlus, Samsung, and Apple made record sales worth about Rs750 crores ($106 million) in 36 hours” on its platform. While this figure reflects India’s massive apatite for high-end devices, it says nothing about Amazon India’s earnings. An e-commerce company typically earns only a small margin on each transaction that it facilitates.

Moreover, these figures don’t account for the onslaught of product returns that follow the shopping frenzy.

“Neither of them has as yet disclosed data with value and volume and split among categories or margins for us to comment on margins and profits,” says Harish HV. Perhaps the only source of massive losses slowing and companies moving better profits and margins compared to earlier is that “deep discounting maybe history other than in a few loss leaders designed to attract customers,” he adds.