The festive season sales by e-commerce majors Amazon India and Walmart-owned Flipkart has begun with a bang.
In the first four days of their flagship sale events, which began on October 15, the two major e-commerce players in the South Asian nation have sold goods worth USD 3.5 billion, local media Economic Times reported, citing industry data.
This is 30% more than what both the companies raked in during the first six days of festive sales last year, which according to market research firm RedSeer stood at USD 2.7 billion. Forrester Research, however, had pegged the one-week numbers at about USD 3.6 billion last year.
Market research and consulting firms Forrester Research and RedSeer have predicted the combined sales by the two e-retail giants to reach about USD 4.7 billion between October 15 and October 22, the first leg of the festive season sales. Amazon and Flipkart are expected to meet the analysts’ predictions for the entire seven-day period.
Bolstered by new online shoppers in the country, RedSeer said the overall combined e-commerce sales during the festive period leading up to November could reach USD 7 billion, up 75% compared to last year, while Forrester has pegged this number at USD 6.5 billion, KrASIA reported.
Big purchases, big bucks
The opening days of the festive sales saw consumers rushing to make big purchases such as smartphones and home appliances.
“The first few opening days of festive sales are skewed towards large value purchases and new launches,” Manish Tiwary, vice president of Amazon India, said in an interview with ET. Amazon claims to have seen over 1,100 new product launches during the sales event.
Companies like Samsung, Apple, LG, and Xiaomi reportedly saw their sales increase by 80-100% across smartphones and consumer durables through e-tail platforms in the four days of the sales compared to the same period last year.
According to the ET report, over 50% of electronic goods purchased on Flipkart were from work-from-home segment, which resulted in a 1.4x jump in sales for large-screen televisions, laptops, IT accessories, and peripherals.
Similarly, this year Amazon saw sales of smartphones grow 2.5x during the four-day sale period compared to last year, said Tiwary. Amazon and Flipkart do not publicly share the break-down of their sales numbers for the festive sales.
Typically, the festive season sale, which begins in October and continues till Diwali, a major Indian festival, accounts for 35-40% of annual revenue for most consumer-facing companies.
Despite the slightly lower average discounts by the brands this year due to the uncertain economic environment, the uptick in sales comes on the back of pent-up demand in Indian consumers, who over the last few months had limited their purchases to essential and necessary products.
According to industry watchers, categories such as smartphones, fashion, and furniture that had seen inventory pile-ups in recent months ran deep discounts, as opposed to segments like televisions and home appliances where the stock was limited.
The critical time period
This year’s festive sales events are critical for online marketplaces as they hope to make up for the slump in business during the national lockdown earlier this year.
The first leg of the annual festive sales is the most important part of the event for e-tailers as consumers make most of their purchases in the first few days, hoping to catch the best discounts given out by e-commerce companies, brands, and banks.
According to Forrester, about 75%, or USD 4.8, of the total projected sales of USD 6.5 billion is expected to occur during October 15 and 21, on the back of Amazon’s Great Indian Festival Sale and Flipkart’s Big Billion Days sales events.
Industry veterans said the consumers are currently able to spend since they had cut down on leisure activities such as dining out and leisure travel over the last six months. It remains to be seen whether this shopping spree would sustain through out the sales period.
Demand will come from these consumers as well as from people who saved money during the lockdown,” Sanjeev Kumar, senior forecast analyst at Forrester, told KrASIA in an earlier interview.
Kumar further said that this year many people moved back to their hometowns as work from home became prevalent. “These consumers who would have ideally bought goods for just themselves would now purchase products for the whole family.”
The overall e-commerce industry has grown by 25-30% during the four-day period, and is on track to increase sales by 30-36% during the one-week period compared to last year, the ET report said, citing e-commerce companies, top brands, and independent analysts.