Tapping into festive fervour

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October 11, 2021 7:02 AM

Expecting higher sales this festive season, e-tailers beef up product offerings and delivery capabilities

The past year saw millions of customers in India take to e-commerce for the first time, and several traditional retail stores embrace online channels.The past year saw millions of customers in India take to e-commerce for the first time, and several traditional retail stores embrace online channels.

The last festive season, despite the evolving pandemic situation, gave some much-needed impetus to the online retail industry. Flipkart and Amazon saw sales growth of over 35% during the festive months of 2020, compared to 2019. This time, given the uptick in consumer sentiment, e-commerce players are aiming higher. According to a recent RedSeer report, e-commerce in India is likely to clock over $9 billion GMV during this festive season, up 23% from last year’s forecast.

Ramping up tech-enabled sorting capabilities and fulfillment facilities, adding newer categories, and expanding quick delivery service are some of the ways e-commerce companies are bracing up for the months ahead.

Ready to roll

Amazon expects the fashion and beauty categories to see high uptake during the festive season — apparel, smartwatches and shoes starting at Rs 299, and beauty products priced Rs 199 onwards. “We have strengthened our storage capacity by over 40% from 2020, to help our 8.5 lakh sellers across India ahead of the festive season,” says Saurabh Srivastava, director and head, Amazon Fashion India.

Snapdeal, too, plans to focus on value e-commerce, and will be selling most products in the Rs 400-600 range, with home and fashion being key categories. The e-commerce platform earns nearly 80% of its business from the non-metros. Apart from bolstering its distribution hubs and logistics network, Snapdeal has added eight new languages to its customer support service recently.

Preempting around 5.5 million customers to shop during its festive sale, Myntra has beefed up its first-mile network hubs and distribution centres, and increased the number of brands on the platform by 40% over the previous edition. It has also scaled up its kirana network by 30%, taking its store count to 25,000. “We will focus on categories like beauty and personal care, kidswear, and others like innerwear and essentials. Our Big Fashion Festival sale this time is expected to see a jump of 1.6-times over the last festive season, with 40% contribution coming from tier II and III markets,” says Ayyappan Rajagopal, chief business officer, Myntra.

For Tata CLiQ, apparel and footwear have been the best performing categories over previous festive seasons, and it expects the same this time, too. That apart, electronics and home décor will also take prominence. “Besides ethnic wear, we are planning to further strengthen categories such as sportswear and beauty, and launch new categories like furniture,” says the company’s chief marketing officer, Kishore Mardikar.

Direct-to-consumer (D2C) brands, too, are looking at the upcoming months to make a strong comeback. D2C fashion brand Bewakoof, for instance, has assigned 15% of its total marketing budget for the October-December quarter. It has expanded its online presence by partnering with marketplaces like Myntra and Tata CLiQ. Prabhkiran Singh, founder and CEO, Bewakoof, says, “Last year, our festive sales were down by 10% due to the pandemic; however, we are now looking at 40% sales growth over last year.”

Most of these players expect tier II markets and beyond to contribute significantly to sales this time around.

Big gains

The past year saw millions of customers in India take to e-commerce for the first time, and several traditional retail stores embrace online channels. Manoj Muthu Kumar, principal at Kearney Consulting, says, “While the overall Indian retail market saw a dip in spending during the pandemic, e-commerce adoption and consumption has accelerated and will likely increase at a CAGR of 27% during 2019-2026.”

The festive season is one of the largest revenue grossers for most e-tailers. Ankur Pahwa, partner at EY, says, “With the number of online shoppers increasing every year, e-commerce will most likely see 40-50% growth in sales this festive season over last year.”

D2C brands, analysts predict, will be one of the key growth drivers this season, especially in the fashion, accessories, wellness, electronics and beverages categories.

Would offline retail returning to normalcy impact the fortunes of e-commerce companies this festive season? Pahwa does not think so. “While it is a great sign that offline retail is bouncing back to pre-pandemic levels and the festive season should give it a further boost, there has been tremendous strain on this channel; offline retailers will quickly need to adapt to new business models to meet customer demands,” he adds.

Read Also: Mamaearth launches ‘Beautiful InDeed’ campaign to redefine the meaning of beauty

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