With the total number of shoppers this festive season tipped to jump to 20 million from 14 million last year, e-retailers are readying for bigger festive season.
With the total number of shoppers this festive season tipped to jump to 20 million from 14 million last year, e-retailers are readying for bigger festive season. RedSeer Consulting believes that consumers from several of India’s smaller cities, especially Tier II towns, will participate in the purchase. “The festive season sale is an important tool used by e-commerce companies to add new customers. Both Flipkart and Amazon have already rolled out several offers and initiatives to ensure that shoppers from smaller cities flock to the platforms,” Ujjwal Chaudhry, engagement manager, RedSeer Consulting, said.
RedSeer Consulting predicts that between them the top two e-commerce players — Amazon and Flipkart—will clock a gross merchandise value (GMV) of around $2.5-3 billion over the five-day festive season sale. This is a jump of almost 67-100% in GMV against the year ago, when the two together had reported a GMV of $1.5 billion.
Flipkart’s Big Billion Days sale will be held between October 10-14, while shoppers can shop at Amazon’s Great India Festival between October 10-15.
Given the sharp increase expected in the total number of shoppers, the two companies are increasing the capcacity of warehouses. Amazon has increased storage capacity by 54% to 20 million cubic feet by launching five new warehouses, also known as fulfilment centres, in cities including Gurgaon (part of Delhi-NCR), Mumbai, Kolkata, Bengaluru and Vijayawada. It claims to have 4 lakh sellers on its platform selling 170 million products. Flipkart too has begun to hire temporary workforce to ensure on-time delivery. The Walmart-owned company has about 35 warehouses across the country.
This is also a reason why this year there is a lot of focus on exclusive deals this year with brands across categories to drive sales this festive season, Manish Tiwary, VP, category management, told FE.
“Festive season is the best time to acquire new customers as well as retain the existing ones. Be it in categories such as mobile where we have an exclusive deal with Xiaomi to sell Redmi 6A, and BPL, TCL for large appliances, this festive season consumers will find a range of products on the platform,” Tiwary said.
According to Tiwary, as the traffic continues to grow on the platform more and more, brands look at hopping onto the platform, while existing ones extend the tenure of the tie-up. For example, the tie-up with mobile brand One Plus is almost four-and-a-half years old.
Flipkart now offers EMI on debit cards. The e-tailer had launched a private label for furniture called ‘Perfect homes’, early this year. The newly launched label is expected to contribute 30-40% of the category’s revenue by end of 2018, said RedSeer in its report. Additionally, in August, it launched 2GUD — a new platform to sell refurbished good. The Walmart-backed e-tailer claims that it aims to capture over 30% of the phone sales during the festive season sale period. According to Flipkart, about 25% of the total number of phones sold in the country are sold through its website.
“Our platform will have a number of new launches in alliance with our handset partners (during the festive sale). There will be devices across price points…we expect strong volumes coming especially in the Rs 10,000-15,000 category as well as the entry-level smartphones (`4,000-7,000),” Ayappan Rajagopal, senior director, smartphones, Flipkart, said.
Its rival Amazon, on the other hand, has launched its website and an app in Hindi in its effort to grab a larger share of the Tier I and II cities. The e-commerce firm has further ramped up its logistics and supply chain network for faster delivery in smaller cities. It has currently 67 fulfilment centres across 13 states. In terms of categories, Redseer expects the share of fashion to increase to 15% from last year’s 13%, while mobile and tablets as a category is expected to a see a decline of 1 percentage point to 52% this year, from last year’s 53%. Electronics’ share in the GMV is also expected to reduce to 23% from last year’s 26%.
As the two companies readies to battle it out this festive season, Redseer points out that the total number of shipments this year would be less when compared to the growth in GMV as consumers are expected to buy more of high ticket value items. Total number of orders expected to get shipped this year is 48 million.