The first phase of the online festive sales in India has generated a total of USD 3 billion in sales for e-tailers including Amazon, Flipkart, Snapdeal, Myntra, Jabong and Paytm, according to a report by Bengaluru-based research firm RedSeer.
Kicked off on September 29, the six-day long festive sales saw a 30% rise in gross merchandise volume (GMV) as compared to last year’s sale. GMV implies the total value of merchandise sold and is a metric used by e-commerce businesses to measure total sales on their platforms.
The second edition of Diwali sales on Amazon is scheduled from October 13 to October 17, while Flipkart will hold the same between October 12 and October 16. The third phase is likely to happen during the Diwali weekend (October 26 to 27), industry insiders told KrASIA.
First started in 2014, a year after Amazon launched its online shopping platform in India, the festive sales became the biggest event for e-tailers in the country. The festive season typically spans the months from October to December, during which Indians celebrate festivals such as Dussehra, Diwali and Christmas. It marks a critical period for e-tailers who start preparing for the festive sales two to three months in advance by forging new partnerships and preparing strategies to attract customers. Thus the sales during this period are especially marked by product launches, deep discounts, and tempting bank offers of loans and no-cost EMIs (equated monthly instalments).
The recently concluded festive sales was dominated by e-commerce giants Amazon and Flipkart, which contributed 90% of the total volume, the RedSeer report said. Flipkart lead the festive sales, accounting for 60-62% of total GMV. This means Amazon could only grab 30% of the total sales pie.
When combined with the group companies Myntra and Jabong, which Flipkart had acquired in 2014 and 2016 respectively, the Walmart-owned e-tailer’s total sales reached 63% of GMV, the report added. Overall, Flipkart’s GMV grew 58% over the last year against Amazon’s 22% growth. Meanwhile, online marketplace Snapdeal said it saw 52% growth in sales volumes during the Diwali sales that it ran from September 29 to October 6, according to a report by wire serviceIANS.
However, Amazon has refuted that it lost to home-grown rival Flipkart.
“We cannot comment on speculative reports that lack robust and credible methodology,” the company told wire service Press Trust of India.
“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 empanelled read of 1.9 lakh (190,000) digital users across over 50 cities,” the spokesperson said.
According to the analysts at RedSeer, the growth was largely led by consumers in tier 2 cities who were wooed by the idea of value shopping, which combined affordable prices and easy EMI options.
The first wave of the festive sale event in October has seen record GMV of almost USD 3 billion despite a challenging macro environment, indicating that consumer sentiment on online shopping remains bullish, said Anil Kumar, the founder and CEO of RedSeer Consulting.
He added that larger push has come from tier 2 and tier 3 customers migrating to online shopping driven by the strong value provided from the online retailers across categories including mobile phones, which have shown a strong surge during sale events despite having an relatively slow growing H1 2019.
Mobile phones emerged as the product which Indians brought the most, having delayed the purchase to the festive season. The category alone accounted for 55% or over USD 1.5 billion in sales for online retailers. In fact, the top three premium smartphone brands in India –Samsung, OnePlus, and Apple–touched USD 105.6 million in sales on the very first day collectively on Flipkart and Amazon.
RedSeer had previously forecasted the total sales of USD 3.7 billion at 60-65% growth rate during the first festive sales event. Looking at the numbers, the analysts now expect e-tailers to generate up to USD 6 billion in total sales across all sales events during the month of October as compared to USD 7 billion projected last month. India’s e-commerce market is likely touch USD 84 billion in 2021 from USD 24 billion in 2017, according to a February 2019 Deloitte report.
This comes as the International Monetary Fund (IMF) warned the global economy of a “synchronised slowdown” earlier this week, stating 90% countries would see slower growth in 2019. In India, last week, the Reserve Bank of India (RBI), the country’s central bank, cut the GDP forecast for this fiscal year to 6.1% from 6.9%.