 "Race on as e-tailers eye $1.5 bn in festive sales")
The festival sale generated about $1.2 billion for e-commerce companies, according to RedSeer Consulting, a researcher tracking e-commerce companies. E-commerce firms are expected to clock $2-billion sales in October.
“After the slowdown in the first six months, the festival sale was to be a green patch. This has been a bumper sale and Flipkart’s execution has been much stronger and it is evident,” said Anil Kumar, founder and chief executive of RedSeer Consulting. “Flipkart had tied up a lot of exclusives for the sale. They had over 16 smartphone brands, television collections, ahead of others. This has helped them a lot.”
Success of festive bonanza could boost the leadership position of Flipkart co-founder and chief executive Binny Bansal, who has taken steps to revive the company amid mark-downs by global analysts and investors. This could also help Flipkart raise fresh funds up to $1 billion, for which it is in talks with US-based retail giant Walmart, among others.
Since he took charge in January, Binny Bansal has gone back to Flipkart’s original premise of superior customer service, while cutting costs, consolidating sellers and improving logistics to reach buyers in smaller towns.
Amazon, which has committed $5 billion for the Indian market, has been growing at 130 per cent a month in a market that has slowed in the past six months. “GMV metric is bogus. It implies the metric of MRP multiplied into the number of units sold. It doesn’t take into account cancellations,” said Amit Agarwal, country manager, Amazon India. “The real metric is gross merchandise sold. It is the net of orders, after discounts and cancellations. If people have it, let us discuss the number.” RedSeer uses the GMV metric to rank players.
Amazon said it sold 15 million units during the six-day sale, with the paid Prime subscriptions being the most bought by consumers. “Fundamentally, this sale is an inflection point in Indian e-commerce. It took 10 years in the US for people to pay for convenience with Prime. In three years of Amazon’s existence in India, people’s desire to pay for convenience is a very healthy inflexion point,” Agarwal added.
Amazon had added two million paid customers for Prime since October 1, said RedSeer. The firm, however, said it does not share Prime customer numbers globally. Amazon said over half its Prime customers in India are from smaller towns. “I am surprised the landscape is not growing. We’re growing 130 per cent every quarter and not just snatching share from other players,” said Agarwal.
Flipkart, on the other hand, said it had been a trendsetter with the shopping festival, which Amazon and Snapdeal have followed. It declined to comment on RedSeer data.
“There has been enormous planning and focus on execution. It is one of those events (Big Billion Days) people look forward to good discounts. It mirrors offline retail, people wait for deals during the festival season, whether it is large appliances or auto,” said Smrithi Ravichandran, director, category design organisation of Flipkart. “Every BBD so far has been a new benchmark. It sets the tone for the next year.”
OCTOBER FESTIVE SALE
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Flipkart had higher sales, 1.7-1.8 times of GMV over Amazon
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40 mn shipments during the sale
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Flipkart claimed 15.5 mn units, Amazon 15 mn and Snapdeal 11 mn
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18-20 mn total shoppers during the sale
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One in four people were first-time shoppers online
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Mobiles were the single biggest GMV contributor
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Amazon says two-thirds of customers came from smaller towns
- Amazon said its Prime subscription was best-seller in the event
Source: RedSeer Consulting, companies; compiled by BS Research Bureau
