IBEF: September 30, 2019
Dispelling the fear that a slowing economy may affect consumer behaviour, e-commerce majors Flipkart and Amazon India have said they witnessed record transactions on their platforms on the first day of their annual festive sale, which started early on Sunday.
While home-grown Flipkart, which is now owned by American retail major Walmart, said it registered two times more sales on Day One of its flagship sale event Big Billion Days (BBD) over last year, rival Amazon claimed it witnessed the biggest opening day sale ever with a huge surge in participation in smaller towns.
According to Amit Agarwal, senior vice-president and country head, Amazon India, the company also saw the single-largest day of Prime sign-ups, with 66 per cent of Prime members shopping in 24 hours coming from tier II and tier III towns. The company added that 91 per cent of new customers were from smaller cities.
"Whether it is the Diwali festival season or any other shopping event, the primary objective for us is to add as many new customers as we can and convert the existing customer into Prime members. We are relevant to customers, no matter the macroeconomic conditions," said Agarwal.
According to Flipkart, it saw huge demand in almost all major categories, including beauty, women's ethnic wear, kidswear, sports, fast-moving consumer goods, baby care, private labels, and furniture on the first day of the sale. The company saw 3x more transactions happening on its platform during early access (from Flipkart Plus customers), compared to last year. The number of transacting customers in tier II and smaller cities doubled over the same period.
"We started this festive season by setting audacious targets. By all indication, this is going to be the biggest festive season that India has witnessed," said Kalyan Krishnamurthy, chief executive officer of Flipkart. "E-commerce has not only lifted consumer sentiment but also driven the industry to set new benchmarks," said Krishnamurthy.
Wearing a black T-shirt with the slogan Bura Na Maano BBD Hai written on it, Krishnamurthy was seen giving a pep talk during the kick-off of the BBD sale at Flipkart's Bengaluru campus. Apart from employees, many of its sellers also attended the event. "As part of fun activities, the firm had invited a mind reader to the event. He asked Kalyan (Krishnamurthy) to think about one of his friends and he correctly guessed that Kalyan was thinking about Flipkart co-founder Sachin Bansal," said a person who was present at the event.
During the first day of the BBD, Flipkart said its affordability constructs saw a high uptake. Customers opting for affordability options spent 2.5X more than other customers. "Affordability and value-driven themes clearly are the pulsating chords for India and Bharat. We are at the centre of it all and are able to serve the ecosystem for their unique needs," said Krishnamurthy. For Amazon, more than 400 million Indians had access to cashback and EMI (equated monthly instalment) offers on Amazon.in with 100 per cent more customers opting for EMI over last year and 75 per cent of these coming from tier-II and tier-III cities. The company said this "Great Indian Festival" also witnessed the biggest 36 hours' opening sale ever for sellers as thousands of sellers got at least one order and Karigar sellers witness a 3X jump in sales.
According to Amazon, it witnessed a massive surge in sales of the top three premium brands OnePlus, Samsung, and Apple. Sales exceeded Rs 750 crore within 36 hours. High-end phones seem to be the big crowd-pullers for Amazon India this season.
"Amazon.in continued to see a great customer response in key categories - premium smartphone brands OnePlus, Samsung, and Apple made record sales worth about Rs 750 crore in 36 hours and large appliances and televisions showed growth of nearly 10X over an average business day," said Agarwal. Customers across 720 cities corresponding to 10,000 plus pin-codes could trade-in and upgrade everything from their old phone, appliances, and TV.
The company said the largest number of new customers shopped for fashion, daily essentials, and consumables. "Almost 91 per cent of new customers came from tier II, tier III and rest of India geographies. Of these almost 43 per cent of all ordered placed so far will get delivered within two days," the company said.
For Flipkart, travel was also the fastest-growing category which saw 12X growth over last year. Also, over 2.3 million consumers engaged with games on the platform. There were close to 10 million new app downloads in less than a month in the run-up to BBD 2019. Over 1.5 million users engaged with the Flipkart Ideas platform in just 24 hours. The sale for the mobiles and electronics category will open on Sunday night.
According to RedSeer Consulting, the category mix of e-tailers is expected to be more diversified this year than any of the previous years, with the non-mobiles segment expected to perform strongly. Mobile phones, though, with slightly subdued demand, however, will continue to rule the roost, it said.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.