Etailers could rake US$ 6.5 billion in sales this festive season
- IBEF
- October 19, 2020
Online retailers in India could rack up cumulative sales of about $6.5 billion over the next four weeks, said analysts as e-shopping emerges as the chosen panacea for pandemic ills. According to a new study by Forrester Research, even as the overall retail pie in the country shrinks due to low footfalls in physical stores, e-commerce could grow by over a third compared to the previous year.
The e-retail surge will be powered primarily by the mega sales events hosted by Flipkart, which is owned by Amazon and Walmart. Together, the e-commerce giants are predicted to rake in revenue of around $4.8 billion during the week of October 15-21, the study said.
Ecommerce industry tracker RedSeer Consultancy had said in an earlier forecast that online sales could almost double to $7 billion during the month-long festive season this year.
“Don’t read this 34% growth (in ecommerce sales) as retail spending coming back,” said Mr. Satish Meena, senior forecast analyst at Forrester Research who estimates the number of online shoppers reach ~60 million, against 45 million e-shoppers last year.
A recent RedSeer Consultancy study also found that more customers are opting to shop online this festive season, as they are looking to stock up more on food, doubling their share to 6%. In categories such as home and furniture as well as appliances, which is projected to account for approximately 14% of gross sales up from 12% last year, other favourite purchases will be.
According to Forrester's findings, the scramble for smartphones and consumer electronics, long the cornerstone of online shopping in India, has slowed this year. Compared to 36% last year, smartphones are expected to drive 34% of gross sales during this festive season, while consumer electronics would contribute about 17%, the report said. However, in the once-popular fashion market, which is projected to account for just 16% of total revenue, the highest degrowth would contrast with 24% last year.
Mr. Meena said, “There is a cut in spending, but since this is the festive period and there is more visibility around the pandemic, some salaries have been restored, these are coming together to drive demand. But it’s clear that instead of going to (physical) stores, people are shopping online”.
RedSeer said in its survey that it saw 91% of respondents saying that they would shop online, compared to 87% last year. The largest rise comes from the metros, where 90 % of respondents said they would buy online this year, compared with 80% last year.
This strong shift in online shopping market preference is forcing brands to adapt their strategies.
Mr. Shital Mehta, CEO, Max Fashion India & Managing Director, Lifestyle International, told ET that with the launch of Myntra and Flipkart, the company has strategically extended its online presence. “We are expanding our scope using e-commerce supply chains with these alliances and targeting a broader range of consumers without affordable trendy products, "he said.
Max had only collaborated with Amazon in India previously.
“Brands have taken ecommerce seriously post covid-19 and have aggressive online sales targets in festive and beyond,” said Mr. Ujjwal Chaudhry of RedSeer Consulting who estimates that the online channel for brands could see a five-fold expansion in the festive period compared to pre-COVID levels. “Private labels (owned by the ecommerce companies) are expected to account for 10% of gross sales,” he said.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
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