Festivals are a massive business opportunity in India, and like every year, e-commerce companies went all out to milk it this time, too.
During the six-day festive sales event between Sept. 29 and Oct. 4, online retailers in India collectively clocked a gross merchandise value (GMV) of around $3 billion (Rs19,000 crore), Bengaluru-based consulting firm Redseer said in a press release from Oct. 8. GMV is the total value for goods or services sold through a marketplace.
Mobile phones were the most-selling product, contributing to more than half of the GMV generated during the festival days.
Although e-tailers missed RedSeer’s projection of $3.7 billion in GMV, they still had a strong performance, marking a 30% year-on-year growth.
The ripple effect of the sale period is likely to carry on for a bit, Redseer said. The entire festive month, which reaches its crescendo with Diwali on Oct. 28, is slated to clock up to $6 billion in sales.
“The first wave of the festive sale event has seen record GMV…despite (a) challenging macro environment, indicating that consumer sentiment on online shopping remains bullish,” said RedSeer founder and CEO Anil Kumar. “The larger push has come from Bharat customers migrating to online shopping.”
The likes of Amazon India and Flipkart have been working on localisation features and opening up new fulfilment centres across the country to tap into “Bharat,” often used to refer to tier-2 Indian cities and beyond. For instance, in early September, Flipkart launched a Hindi interface to tap into the non-English speaking population in India.
These consumers are “shifting their offline spending to online during these sale days, and increasing the ticket size of their purchases,” Satish Meena, a senior forecast analyst at Forrester Research Inc, told daily newspaper The Economic Times.
Generally, Amazon India has said that as many as 91% of its new customers are from tier-2, tier-3 and even smaller towns. During these festival sales Flipkart said more than half its shoppers came from outside metros and tier 1 cities.
A market for two?
The two behemoths, Flipkart and Amazon, dominated the sales events accounting for 90% of the total e-commerce sales during the period.
“Flipkart continued to lead the festive sales in GMV terms, with 60-62% standalone GMV share during sale event, and ~63% share if other group entities (Myntra and Jabong) are also included,” RedSeer noted. “Strong performance across categories including mobiles was the key reason for Flipkart leadership.” The company said more than 20 models sold over 100,0000 units each during the Big Billion Days 2019—a first for any event, it claimed.
“We cannot comment on speculative reports that lack robust and credible methodology. During the Great Indian Festival, Amazon led with the highest share of transacting customers at 51%, order share of 42% and value share of 45% across all marketplaces in India according to Nielsen’s E-Analytics empaneled read of 190,000 digital users across 50+ cities,” an Amazon spokesperson told Quartz.
Flipkart’s glory run was “enabled by strong value prices, high EMIs adoption and diverse selection across categories, all marketed aggressively to reach customers widely,” RedSeer said. The share of transactions via affordability constructs such as EMIs, Flipkart Pay Later and Cardless Credit increased by 70% compared to last year.
Meanwhile, on Amazon, too, such programmes were a hit with one out of three eligible products being purchased using exchange, EMIs and bank cashback options. Over 70% of customers who availed credit were from lower tier towns.