IBEF: October 10, 2019
E-tailers sold merchandise of worth Rs 19,000 crore (US$ 3 billion) during the first six days of the festive season sale that was organised in the first week of October. This was mainly led by Amazon and Flipkart.
The revenue for e-commerce majors is expected to reach Rs 39,000 crore (US$ 6 billion) for the month of October 2019.
Sales witnessed growth of 30 per cent year-on-year, up from US$ 2.3 billion last year, with the majority share coming from customers in Tier-2 cities and smaller towns led by the wide selection and affordability offers.
The category leader during the previous years sale was mobile phones, contributing to over 55 per cent of gross merchandise value (GMV).
According to Mr. Anil Kumar, Founder and CEO, RedSeer Consulting, "The first wave of the festival sale event has seen a record GMV of almost US$ 3 billion despite a challenging macro environment, indicating that consumer sentiment on online shopping remains bullish."
He added, "The larger push has come from Bharat (non-metro) customers migrating to online shopping driven by the strong value provided from the online retailers across categories including mobiles, which have shown a strong surge during sale event despite having a relatively slow growing half year from January-June."
According to RedSeer, during the sale, Flipkart standalone gross GMV share stood at 60-62 per cent and 63 per cent along with its group entities Myntra and Jabong, making it the market leader. The market share of Amazon was pegged at 28-30 per cent and the rest was held by other e-tailers.
According to Amazon spokesperson, "We cannot comment on speculative reports that lack robust and credible methodology. During the Great Indian Festival (September 28-October 4), Amazon led with the highest share of transacting customers at 51 per cent, order share of 42 per cent and value share of 45 per cent across all marketplaces in India, according to Nielsen's E-Analytics empanelled read of 190,000 digital users across 50 plus cities."
The Amazon spokesperson further added, "With orders from 99.4 per cent pin codes, over 65,000 sellers from 500 plus cities receiving orders in just five days, customers from over 15,000 pin codes joining Prime and over 88 per cent new customers coming from small towns, this event has been our biggest celebration ever."
Although, the blockbuster festival season sales cannot indicate a positive turn of prevailing weak consumer sentiment as the contribution of e-commerce is as low as 2 per cent of retail sales.
K Vaitheeswaran, founder of Indiaplaza, the country's first e-commerce company, and co-founder of Again Drinks, pointed that the trend will continue throughout the festival season sale period which is till the end of October as the online shoppers are expected to further utilise the opportunity to fulfil their requirements with the deep discount deals.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.