E-commerce clocks $2.7 bn in four days of festive sales

E-commerce platforms such as Flipkart and Amazon India got $2.7 billion in the first four days of festive sales that began on 2 October, including early access for premium members, according to estimates from management consultancy RedSeer Consulting. 

The strong initial performance is expected to help online retail cross $4.8 billion of gross merchandise value (GMV) during the first week of the festive sales that ended on Sunday. The data also includes social commerce and grocery platforms, RedSeer said.

Last year, the first four days of the festive week contributed 63% of overall festive week sales, compared with this year’s 57% of projected sales. 

“With festive sales lasting longer than last year (9 days compared with 7 days), we are observing the customer demand being more spread out across the period than being concentrated in the first half of the festive week. To that tune, we have observed sales of $2.7 billion across e-commerce platforms and we expect a further $2.1 billion over the remaining five days (end of festive week)," said Ujjwal Chaudhry, associate partner at RedSeer. 

Smartphones were the highest-selling product this festive season, too, contributing almost 50% of overall e-commerce GMV in the early days of the sale, RedSeer said. 

With Flipkart also drawing its annual The Big Billion Days (TBBD) sale to a close on Sunday, the e-commerce major said total premium smartphones sold during this year’s sale doubled, compared with last year. Lifestyle, electronics, books, general merchandise, home improvement, and mobiles were top categories for this year’s sale event, it said. The home improvement category saw 80% growth with people continuing to buy furniture and mattresses as work from home persists.

“This year’s Big Billion Days has been steeped in the spirit of revival and growth, as we saw a resurgence in consumption and a marked shift towards online shopping. We have continued to provide our consumers the best and most relevant offerings, made available through a large network of sellers and a range of affordability constructs, making their shopping experience easy and seamless," said Nandita Sinha, vice president, customer and growth, Flipkart. 

Flipkart also saw 55% new sellers during its Big Billion Days sale, with almost 10% of overall sellers on its platform witnessing three-fold growth in sales this year.

Snapdeal, which ran its Toofani Sale from 3 October to 10 October, saw a 98% increase in overall sale volumes this year. About 60% of total orders on its platform came from Tier-III cities, it said. The value of sales from Tier-III cities also increased 74% from last year, Snapdeal said. 

“With many more sellers from across India now participating in online sales, buyers now have access to a wider range of products," said a Snapdeal spokesperson.

For Flipkart-owned Myntra, 45% of orders came from tier-II and -III towns, with beauty, personal care, and accessories being high-growth categories on its platform.

Amazon India did not respond to Mint’s queries until press time. 

RedSeer had said earlier that the e-commerce platforms will clock more than $9 billion GMV during the festive season, a 23% growth from last year.  Horizontal platforms have rapidly scaled up warehousing capabilities to ensure prompt delivery. As such, delivery time is expected to reduce by roughly five hours this year, compared with 2020.

Why Indian E-commerce Market Is Optimistic

India’s online market recovered quickly after the nationwide lockdown and also witnessed a successful festive sales period ever

The competition in the online business in India is furious. The market is loaded up with numerous nearby and unfamiliar organizations attempting to hold the most extreme portion of the overall industry. Expanding development in the e-commerce based business industry is credited for various reasons. Digitizing the economy and giving cheap internet to individuals are a couple of numerous reasons that supported the development of digital sales in India. The E-commerce retailers however thought that the initial few weeks of the lockdown were testing for e-commerce players but, they were eventually able to emerge as winners. India’s online market recovered quickly after the nationwide lockdown and also witnessed a successful festive sales period ever.

It goes without saying that cloth/daily wear apparels is one of the basic needs and requirements after food. It is nothing less than any essential commodity, and that's why even during lockdown online textile industry saw a boom in sales and will continue in future as well. The online textile industry even registered an increasing trend in sales due to no dependency on the offline industry for example wholesaler, semi wholesaler, retailers, middle persons etc and this will continue in future as well.

The online textile industry has all the valid reasons to give birth to new Unicorns in India. Right from choosing items to trying them, even the return policies created a win-win situation for shoppers on the internet as customers felt very comfortable purchasing stuff online. And, hence, the birth of online retailers Unicorns is imminent. The following reasons proved to be advantageous for the industry:

1. Many e-commerce players started assessing consumer preferences and also started aligning product categories and offer accordingly. For instance, many clothing brands have also assessed this and have started a new segment “Ethnic Lounge Wear/comfortable wear” as most of the people are doing work from home during these pandemic times.

2. In the same way Indian Organizations have also started adapting their supply chain to ensure adequate supplies are on hand to meet demand along with a “buffer” stock of essential items. Approaches like drop-shipping, contactless approach are being explored for seamless delivery of the items.

3. Customers during this pandemic enjoyed a personalized experience and highly eliminated the hassle of visiting various shops, reducing the possibilities of contracting the disease.”

4. Where mobility and supply chain witnessed irregularities, e-commerce emerged as an ideal solution providing delivery services without compromising social distancing practice.

Also with the recent development in E-Commerce rules, mixed signals can be interpreted. The policies ask the sellers to mention country of origin on their products. This is an initiative boosting the Make-In India campaign as buyers will be getting an informed choice. However new set of policies may witness an outage from foreign investors but nothing much could be done. India is too big a market to be ignored. Yet, time and again the policies will take shape and prove to be smooth further ahead. Conquering all odds, e-commerce business is an example of overcoming adversity, consistently providing items and administrations, as small and medium scale organizations sold their items close by huge players during the pandemic. The recently proposed rules appear more to do with platforms than buyers and are probably going to discourage inefficient players.

The value of fast and secure shipping is a consideration for both shoppers and businesses selling online. When everything came to a standstill, e-commerce/virtual shopping ensured continuity in the country’s economic operations confirming that E-Commerce will be the future for the Indian Economy. Indian E-commerce is emerging as a demand along with the population and likewise will contribute to the country’s revenue model also.

Sellers on Amazon, Flipkart, other shopping portals offer additional discounts to sell more

MSMEs and other sellers on e-commerce platforms and social commerce platforms, which have enabled around $2.7-billion worth gross merchandise value (GMV) during the first four days of festive sales, are offering additional discounts for higher sales volume. The online sellers said they are providing up to 40 per cent or more additional discounts on the back of “a favourable perspective of forecasted volume sales and growth during the upcoming festive season,” management consulting firm RedSeer said in its report on the first week of the festive sale. While the e-commerce market in India is led by Amazon and Flipkart, social commerce platform Meesho had turned unicorn in April this year.

In a survey of sellers across e-commerce and social commerce platforms in September, the majority of respondents said they are providing additional discounts of 30-40 per cent followed by respondents who are offering discounts between 20-30 per cent. For instance, the survey noted that on an e-commerce platform (without disclosing its name) 32 per cent respondents claimed offering 30-40 per cent additional discount followed by 21 per cent respondents offering 20-30 per cent additional discount, 20 per cent offering 10-20 per cent discount, 19 per cent offering over 40 per cent discount, etc.

Amazon and Flipkart had launched their annual festive sales on October 3, 2021. While Flipkart’s Big Billion Days would conclude on Sunday, Amazon’s Great Indian Festival sale would last for a month. Meesho’s Maha Indian Shopping League was scheduled from October 6 to 10. Importantly, the report noted that the first four days of the festive week last year accounted for 63 per cent of the overall festive week sales vis-a-vis this year’s around 57 per cent of the projected sales. Smartphones had contributed around 50 per cent of GMV during the first four days of sales.

“With the festive sales lasting longer than last year (9 days compared to 7 days), we are observing the customer demand being more spread out across the period than being concentrated in the first half of the festive week. To that tune, we have observed sales of around $2.7 billion across e-commerce platforms and we expect another further $2.1 billion over the next five days,” said Ujjwal Chaudhry, Associate Partner, RedSeer.

According to Amazon, its more than 8.5 lakh sellers in India including over 75,000 local shops from 450 cities and other sellers under various Amazon programmes such as Amazon Launchpad, Amazon Saheli, Amazon Karigar are participating in the sale. Walmart’s Flipkart had last month said that over 1 lakh kiranas and overall more than 3,75,000 sellers from across India would participate in the Big Billion Days. It plans to have 4.2 lakh sellers on its platform by December 2021.

Trends shaping India’s ecommerce landscape

COVID-19 has accelerated the shift to online shopping, and this shift persists across categories as consumers continue to keep their out-of-home engagement low to curb the spread of the virus.

Even though restrictions by authorities have been eased in most parts of the country and physical stores are now open, the growth trajectory of the ecommerce industry looks unlikely to shift down. We are entering a world that will be the amalgamation of online and offline shopping. The rising number of first-time online shoppers across India and ecommerce users from Tier II and Tier III cities of India are driving the ecommerce growth.

As ecommerce becomes an integral part of retail, these trends have been the driving force for the last couple of years and will continue to shape the future of ecommerce industry.

Digital-first brands leading the way 

As consumers across demographics make their purchases online, more consumer brands are setting up their digital stores to directly engage with customers. The digital-first D2C wave has swept the ecommerce industry.

The success of digital-first companies like Mamaearth, Nykaa, and SUGAR Cosmetics has been phenomenal and took the industry by storm. This has also influenced traditional FMCG giants and personal care brands to invest heavily towards developing their own website in an attempt to build customer loyalty.

In fact, some of the leading FMCG companies have also acquired or invested in few digital-first brands.

According to Unicommerce reports, brand websites are performing way better than the marketplace with 80-90 percent order volume growth in the last year. While D2C and digital-first brands are growing at a lightning speed, the marketplaces will always be the volume drivers, and hence D2C brands continue to focus on both website and marketplaces as important channels to interact with consumers.

As the number of digital-first and D2C brands continue to rise in India, the ecommerce industry is witnessing the emerging Thrasio style model in India. A lot of new companies have emerged in the last year with a similar model and they are looking to acquire these Digital-first and D2C brands of India.

These companies have raised funding from some of the marquee investors. This will also further promote the culture of D2C, leading to the launch of many more digital-first brands.

New E-com, fashion brands see surge in sales as festive season begins

 

New Delhi: As Amazon and Flipkart dominate headlines in the festive sale season, other e-commerce and luxury fashion brands are also witnessing bumper sales especially from the tier 2 and 3 cities, keeping their cash registers ringing.

Fashion e-commerce giant Myntra reported record-breaking 19 million visitors on the first day of its sale and 6 lakh items were purchased in the first hour. The first day witnessed customers shopping over 4 million items, of which 40 per cent of the orders were from tier 2 and 3 cities and beyond.

Top categories for women were women's ethnic, women's westernwear, beauty and personal care and for men, it was casualwear, occasion wear, workwear and sports apparel.

"The remarkable participation from new customers at 20 per cent during the opening of the event and 40 per cent of the orders being placed from tier 2 and 3 cities and beyond, goes on to show the impact our consumer engagement initiatives, celebrity associations, as well as a substantial festive offering, has created," said Amar Nagaram, CEO, Myntra.

An integral part of the Flipkart Group, Myntra has partnered with over 5,000 leading fashion and lifestyle brands in the country.

Reliance Group's online fashion e-retailer Ajio, which organised festive sales from September 30 till October 4 with multiple celebrities like Sidharth Malhotra and Sonam K Ahuja endorsing its #BigBoldSale campaign, has received tremendous response from across the country.

Luxury lifestyle platform Tata CLiQ Luxury is hosting its annual '10 on 10' sale from October 6-15, that will have attractive offers on luxury brands across categories,

Through the '10 on 10' sale, Tata CLiQ Luxury is looking at sales doubling across categories.

"For the 10 on 10 sale, we have curated a range of thoughtful gifting options to celebrate stories and special bonds this festive season. To offer the best deals this season, we have expanded our assortment and are introducing exciting offers on luxury brands across multiple categories," said Gitanjali Saxena, Business Head-Global Luxury, Tata CLiQ Luxury. Tata CLiQ is owned by Tata UniStore Limited of Tata Group, and operates in categories such as electronics, fashion, footwear and accessories.

"With more than 100 per cent YoY growth and increase in customer base, we are expecting a strong festive season this year," Saxena added.

According to Prabhu Ram, Head- Industry Intelligence Group (IIG), CyberMedia Research (CMR), this is where highly niche, uber-luxe, bespoke e-commerce platforms catering to the niche consumer demographic are doing extremely well.

"In sharp contrast to the large e-commerce platforms that cater to value-conscious buyers with attractive discounts and offers, these niche e-commerce platforms prioritise convenience over cost," Ram told IANS.

Global market research firm Forrester expects online retailers in India to generate about $9.2 billion in sales during the 2021 festive month, up 42 per cent (year-over-year) from the estimate of $6.5 billion in festive month sales during 2020.

In just the first week (October 3 to 10), it estimates that $6.4 billion of online sales, about 70 per cent of the festive month total online sales, will happen.

"Now, users from tier-two and tier-three cities are also contributing significantly to the market growth. Around 75 million online buyers will participate during this festive season, of which 50 million will come from tier-two cities and beyond," said Jitender Miglani, senior forecast analyst, Forrester.