Monday 17 August 2015

E-tailers notch up massive gains, customer acquisitions via I-Day promotions

As India celebrated its 69th Independence Day last week, the country's e-commerce majors battled it out with a slew of offers and discounts in a bid to make most of consumer's patriotic sentiments. 

Some of the prominent and much advertised promotions were: Amazon India's "Great Indian Freedom Sale"(August 10th and 12), Flipkart's "Freedom Sale"(August 7 and 8), Snapdeal's "Freedom Week" (August 10-16) and HomeShop18's 'Now or Never' offer.

All e-commerce promotions let consumers buy the best of fashion, lifestyle, home and electronic products at slashed prices. For e-tailers, on the other side, I-Day promotions turned out to be a booster shot for upcoming online festive discount season. 

"The first day of The Great India Freedom Sale was the biggest day in the history of Amazon in India. The first two days combined were 50% bigger in terms of sales as compared to the first two days of the Summer Sale and eight times bigger than the previous week," an Amazon India spokesperson told Indiaretailing.

Even though the company's website crashed within first two hours of the sale opening, due to heavy traffic on the website, the company claims that the Independence Day promotion revenues surpassed its previous sales.

"We had hosted The Great Indian Summer Sale on the 6th, 7th and 8th of May. 6th May, which was the first day of that event, was the biggest ever for us, surpassing the previous two crescendos (during Diwali last year) put together in one single day. The first day of The Great Indian Freedom Sale has surpassed that by a wide margin," the spokesperson added.

Flipkart also witnessed a satisfying sales spurt during its two day promotion. The incremental take-offs were, however, much lower than those of rival Amazon India. “Overall, we saw a 3x growth through this sale," said a Flipkart's spokesperson, while refusing to share further details.

"The top performing categories were fashion, home and large appliances ," he added. 

The categories most in demand on were large appliances, automotive products and software products. "We witnessed a four fold jump in these categories during the event days' a majority of our sellers have witnessed a steep increase in sales during the event, " said the Amazon spokesperson.

In addition to consumers from metro cities, Amazon also recorded new customers from smaller towns transacting on the Amazon App for the first time during this sale. 

"Total number of new customers to the site grew by 33%, of which 65% new customers came from the App and 70% of new customers came from Tier II and Tier III cities and towns," the spokesperson said. 

Online sports & fitness portal also saw an increase in number of orders from smaller cities during its Independence Day special promotion. 

"A large chunk of orders were from cities likes Bangalore, Chennai, Delhi, Hyderabad, Mumbai and Pune. Interestingly, we also saw a good number of orders from Tier II cities like Ludhiana, Dheradun, Shillong, Vijaywada and Guwahati," said Aashutosh Chaudhari, Co-founder and Vice President, 

The reason, notably, could be the lack of organised brick and mortar retailers in these smaller cities and rise of mobile penetration in India. 

According to CBRE India Consumer Survey 2015, modern physical retail is concentrated in the top 25-30 cities and most brick-and-mortar retailers and brands are unable to meet the rising aspiration in smaller cities. 
India's online retail industry is expected to take the lead throughout the festive season, starting from September end, through discounts, exclusive merchandise, cash-back schemes, and other promotional offers. 

Last year, during the Big Billion Day, Flipkart's biggest sales event on October 6, the company sold 20 lakh products worth about $100 million (over Rs 600 crore). 

Snapdeal also touched gross merchandise sales of over Rs 700 crore in October last year during its Diwali bumper sales, significantly higher than its sales of Rs 450-500 crore over the preceding three months. 

Flush with cash from recent fund-raising efforts, India’s e-commerce majors are all set to make this festive season sales more better and bigger. 

Flipkart announced in July that it had received as much as USD 1 billion in fresh capital, the largest-ever fund raising by an Indian start-up and among the largest-ever by any Internet start-up globally. Snapdeal also reportedly is in talks to raise another large round of funding merely three months after it raised USD 133.77 million earlier this year.

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