Bharat starts festive rush for Amazon

Digbijay Mishra | TNN

Bengaluru: Consumers from non-metro cities and users shopping on Hindi interface are helping e-commerce majors like Amazon to kick off its annual flagship sale event with growth momentum amid sombre macro-economic trends.

According to Amazon India head Amit Agarwal, in the first 36 hours of its annual sale that started on Sunday, including the 12-hour early access for Prime users from Saturday afternoon, the company has seen a record number of new Prime subscription sign-ups in a single day in the country.

Interestingly, 66% of Amazon’s Prime subscribers, who shopped were from non-metro markets. Since its launch in 2016, Prime has become popular in urban areas.

This comes at a time when e-tailers like Amazon and Flipkart have been focusing on the next set of internet users from beyond the top 10 cities to drive sales growth. Agarwal told TOI that 90% of the most viewed products on Amazon were translated in Hindi, signifying the growing importance of local languages in driving new customer growth.

It launched the Hindi interface about a year ago. Prime is a paid subscription programme, which offers next-day and two-day delivery as well as access to Amazon’s streaming platform—Prime Video. Amazon does not disclose India-specific Prime users but globally it has over 100 million paid subscribers. Prime users typically transact more often on Amazon than non-Prime users. Even though Amazon offers monthly Prime subscriptions in India, Agarwal said most of the new subscribers have opted for an annual subscription.

“New customers who shopped for the first time with us was highest in our history. 91% of these new customers came from small towns with fashion being the top category for them, closely followed by smartphones. Because of our affordability programmes, a record number of consumers upgraded to premium smartphones. If I look at premium smartphones only, like One Plus, Apple and Samsung, we have exceeded sales worth over Rs 750 crore so far,” said Agarwal. He added he was surprised by the growth coming for Prime in small towns and that it has been a ‘digital Bharat’ (often used to describe rural India) festival so far.

Earlier last week, market research firm Forrester said the top two e-commerce players, Amazon and Flipkart, together are expected to clock gross sales of $3.8 billion in the six-day sale events, a jump of over 30%. Flipkart, in a statement, said the number of transacting customers from tier II and beyond have doubled for the e-tailer this year on the first day of its BigBillionDays sale compared to 2018. Overall too, Flipkart said its first day sales grew by two times compared to last year.

“Customers from tier III and tier IV towns are starting to spend more online across fashion and large appliances. Another factor helping e-tailers is relatively less excitement in the offline retail space, which is sending consumers to buy products online,” said Satish Meena, senior forecast analyst, Forrester.

Many consumer-oriented companies in the FMCG sector and others have seen sales slowing down in the past few months. A recovery across retail spends is expected after the government announced a cut in the corporate tax rate this month.