Signs of spark: Amazon, Flipkart bet big on festive sales spike
The marketplaces could see a surge of over 40% in consumer traffic during the festive season.
Executives of leading brands said the marketplaces have projected a surge of over 40% in consumer traffic during the festive season, which is the largest shopping period for Indian consumers. The marketplaces expect much of these will be converted into actual sales led by discounts and first-time online shoppers, they said.
‘Steepest Discounts of the Year’
Two executives said consumers can look forward to some of the highest discounts this year during festive season sales, which will be led primarily by online-exclusive brands, with sellers pushing them to pare margins. The first major online festive sale is likely to begin from end-September this year during Navratri and there will be multiple such promotions until Diwali toward the end of October.
Smartphone maker Realme India CEO Madhav Sheth said sales during Diwali are likely to go up by 8-10% compared with 5-6% growth expected during all of 2019. “We expect migration from feature phones to smartphones will drive sales, while for us festive orders have doubled over last year,” he said.
Executives at online-focussed electronics brands such as TCL, Kodak, Thomson and iFFalcon said their festive orders have increased 80-100%. For instance, TCL and iFFalcon together sold 225,000 televisions in the last festive season whereas this year marketplaces are stocking more than twice that number.
“While Independence Day sales was good for televisions after a bad June-July boosted by discounts, consumers can look forward to the steepest discount of this year during the festive season,” said Avneet Singh Marwah, CEO of Super Plastronics, licensee of Thomson and Kodak.
Smartphones, consumer electronics and apparel are the three largest contributors to ecommerce sales in India, accounting for around 80% of business.
On average, online discounts have come down this year after the government tightened norms for foreign-funded online marketplaces. But studies have indicated that ecommerce’s contribution to total sales is going up due to convenience, the wider variety available and new shoppers who are coming on board as internet access gets cheaper.
A Flipkart India spokesperson said the marketplace was reporting “very good growth” and was confident of “continued growth” during the festive season. “We are a value player in ecommerce,” he said. “The Flipkart marketplace does more listings at a time when the market seems to be bit slow. So, we do not see a slowdown in that climate.”
Amazon India didn’t respond to queries.
Electronics brand BPL’s chief operation officer Manmohan Ganesh said festive orders this year have gone up by 55% over last year when it had gone up by 25%. “The marketplaces are bullish since consumer sentiments tend to improve during Durga Puja, Dussehra and Diwali and it’s not that people have less cash, nor is there any salary cut,” he said.
Apparel brand Biba’s MD Siddharth Bindra said the marketplaces are hoping and planning for a good Diwali and confirmed there is a surge in orders. The CEO of a leading apparel maker that sells multiple brands online also said the same was happening, led by Flipkart, but declined to give any numbers.
Electronics and smartphone industry market researcher GfK India’s MD Nikhil Mathur said value growth will improve during the festive season led by the purchase of premium models with several new launches by smartphone brands and lucrative schemes by electronic brands.