FB Pixel no scriptFestive season sale to the rescue of Indian e-commerce sector | KrASIA

Festive season sale to the rescue of Indian e-commerce sector

Written by Avanish Tiwary Published on   4 mins read

Forrester expects that 75% of USD 6.5 billion forecasted sales will happen in the first tranche of the sale period when mega sales events are held.

Indian e-commerce majors Flipkart and Amazon India have pinned all their hopes on this year’s festive season sales anticipating festive-mood-charged consumers would bite on the deep discounts they dangled.

Because this would be their last chance in a challenging year to make up for the nosedive in their businesses mostly resulting from the three months long lockdown to combat novel coronavirus.

Need to spend

Despite the country’s economy going through a slowdown, analysts have predicted this year’s festive season sale to be the largest compared to the previous ones. While Bengaluru-based research firm RedSeer Consulting said the combined e-commerce sales during the festive period leading up to November could reach USD 7 billion, up 75% compared to the last year, Forrester has pegged this number at USD 6.5 billion, KrASIA reported.

RedSeer said the growth in e-commerce has been rapid and the industry has seen good recovery after the lockdown was lifted in June. “If we talk about August month, both Amazon and Flipkart recorded 1.5X jump in sales compared to January,” Saurav Chachan, senior consultant at RedSeer told KrASIA.

The growth is mainly driven by capped consumer’ spending during the lockdown, as well as the mega sales events that will see the 250 million netizens participating from across the country, hunting for bargains, renovating their kitchens, and stockpiling necessities.


Read this: Flipkart ties up with banks ahead of Indian festive season to bolster sales

However, Forrester believes consumers are still in the money-saving phase due to the poor job outlook in many industries. The research firm said people would buy products that have good discount rates and stay away from spontaneous buying.

“There are industries like hospitality and travel that are still suffering, so spending power has decreased this year. But then this is not wide-spread and there are sectors that have hired new white-collar employees. 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.

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.”

This is exactly what has happened in the first two days of the sale over the weekend. Both Amazon India and Flipkart said they saw an increase in participation from smaller towns this year, including sign-ups of new customers.

In the first two days of the beginning of the sale, Amazon India said that each of the more than 110,000 third-party sellers has received at least one order during its Great Indian Festival sale.

According to Forrester, 75% of USD 6.5 billion forecasted sales would happen in the first tranche of the sale period.

Moving online

Kumar from Forrester said e-commerce players would also benefit from the fact that there’d be lesser offline sales or discounts offered compared to previous festive periods. According to him, e-commerce players would see an increase in offline stores selling through Flipkart and Amazon.

“We are humbled how sellers, brands, and ecosystem partners nationwide have come together during these unprecedented times to spread joy across the country. We look forward to helping their businesses get back on track, and safely deliver joy to our customers during this festive season,” Manish Tiwary, vice president, Amazon India, said in a statement.

Amazon said it saw 66% new sign-ups for Prime membership coming from smaller towns. Similarly, Flipkart also said half of its new customers who bought during its Big Billion Day sale hailed from tier 3 cities and beyond. The smaller rival Snapdeal, that has made a comeback in this year’s sale period said close to 30% of the total orders on the first day of the sale came from first-time online buyers.

Both Amazon and Flipkart have been offering discounts ranging from 20% to 80% on a range of products. Amazon said categories like smartphones, large appliances, TVs, and consumer electronics have been most popular among consumers in the first two days. It has partnered with manufacturers for exclusive launches in the above-mentioned categories.

It is to be noted that this year, Amazon will run its sale for a month, unlike previous sale periods that were active for five days. Flipkart has stuck to the previous year format. Analysts believe most of the sales would happen in the first four days of the sale period.

“Generally, e-commerce players run sale promotions in three tranches, the biggest being the first one. Then they have second and third sale periods juxtaposed to festivals like Diwali and Dussehra. These usually continue till November,” Chachan from RedSeer said. According to him, Amazon has just clubbed all the different sale periods into one.

Chachan believes Amazon is hoping to keep the customers excited throughout the month rather than breaking their shopping spree. According to him, once the first tranche of the promotion is over, Amazon would offer category-wise discount offers on select dates so that customers excitedly wait for that specific day to make their purchase.

Samsung India that has exclusively launched its handsets Samsung Galaxy M51 and Galaxy M31 Prime, as well as a new washing machine model on Amazon India, said, “The Great Indian Festival has already become the biggest days for Samsung Mobiles in India.”

While electronics and large appliances are expected to boost e-tailers’ sales, apparel is going to see a setback. Apparel used to be one of the top grossers for online marketplaces during the festive period, but this year analysts believe consumers are not going to upgrade their wardrobe.

“Although people tend to buy new clothes for festivity reasons, this year is going to be different as people are not going to go out due to the pandemic. This will be a year of anomaly for the apparel sector,” Kumar said.


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