SoftBank-backed Meesho has overtaken Amazon to win the second spot in the first week of the festive season sales, posting bigger order volumes. The sales were held from September 22-30.
Analysts at Redseer said, however, the average order value (AOV) at Meesho was smaller than those for Amazon and Flipkart group which kept it from contributing significantly to the overall gross merchandise value (GMV).
The total GMV hit $5.7 billion in the week, a rise of 27% over the same period last year, but a shade lower than Redseer’s estimate of $5.9 billion. An estimated 75-80 million went shopping, a 24% year-on-year rise. Additionally nearly 50% of shoppers opted for cash on delivery, lower than the 58% in 2019.
In terms of order volumes, Flipkart group was the leader with a market share of 49%, while Meesho followed with 21%. Redseer did
not separately calculate Amazon’s share in the segment, in terms of the order volumes.
Amazon in a statement, meanwhile,said, “We cannot comment on speculative reports without robust and transparent methodology especially as these have not been shared with us.”
“We witnessed the highest ever start to the event in the first 48 hours, with 8X sales as compared to the average business days. This response is reflected across all categories and we have overall seen a substantial increase in visitors vs 2021,” it added.
The bigger order values helped Flipkart stay the market leader with a 62% share of the GMV, while Amazon enjoyed a 26% share of the market. Players like Meesho, Nykaa, JioMart and the like together accounted for the remaining 12% of the total GMV during the week.
“Meesho’s AOV is at least 60-65% lower than Amazon’s or Flipkart’s, they’re almost non-comparable. Also because Flipkart sells smartphones which are priced at Rs 13,000-14,000, but Meesho sells fashion products which are about Rs 250-300,” an analyst told FE.
Further, Meesho benefited because this time around, sales were driven by Tier-2 cities and those beyond them. About 65% of the sales during the first week of this year’s festive sale came from Tier-2 and beyond cities, where Amazon’s presence is relatively low, analysts said.
Flipkart and Amazon fulfilled a majority of their orders through their own captive logistics arms, while Meesho used third-party logistics players. Utkrishta Kumar, CXO, Business, Meesho, told FE the company created about 0.25 million jobs for its logistics partners, just for this festive season.
“The traffic on the app was also at an all-time high and the app visit to sale conversion rate was higher,” Kumar said, without revealing specific numbers.
Meesho added that its app downloads in September were at 30.6 million. Flipkart had earlier said it saw 35 million app downloads in the run-up to the festive sale, lower than the 50.5 million downloads it saw last festive season which still gave it 62% market share, according to estimates by Bernstein analysts.
As reported earlier, mobile phones — accounting for about 41% of the total GMV — and the fashion category, making up about 20% of the total GMV, led the festive season sale.
With 56,000 phones sold every hour, the category’s GMV was 7x of the business as usual (BAU) days, while the fashion’s segment reported a 3x jump from the BAU days. Electronics plus large appliances’ GMV increased 5x from BAU while all other categories saw a mere 2x increase.
Other players also fared well. JioMart — primarily into grocery items — has been expanding into other categories like electronics, home and kitchen, fashion and lifestyle. The app recorded a 2x jump over BAU days, Redseer analysts said.
“JioMart has been trying to position itself as a horizontal platform this time, getting out of the grocery shadows. So, while the growth numbers may look that big, they have seen decent traction in terms of selling mobiles and electronics online,” Sanjay Kothari, associate partner, Redseer, said.