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    Amazon, Flipkart combined festive sales hit $3.5 billion in just four days

    Synopsis

    Industry consultants Forrester Research and RedSeer Consulting are pegging cumulative sales by the two e-tailers from October 15 to October 22 at about $4.7 billion on average.

    ETtech
    Illustration: Rahul Awasthi
    India’s biggest e-commerce players by market share, Amazon and Flipkart, have together raked in $3.5 billion (about Rs 26,000 crore) during the first four days of their flagship festive season sales events, multiple brands and industry analysts told ET, with both the online marketplaces on track to meet expectations for the entire seven-day period.

    Industry consultants Forrester Research and RedSeer Consulting are pegging cumulative sales by the two e-tailers from October 15 to October 22 at about $4.7 billion on average.

    “The first few opening days of festive sales are skewed towards large value purchases and new launches," Manish Tiwary, vice president of Amazon India, told ET.

    Tiwary said this year more than 1,100 new product launches took place on Amazon, with consumer-facing brands such as Samsung, Apple, Xiaomi, OnePlus, Asus, Lenovo, HP, LG, Whirlpool and Bajaj Appliances witnessing their biggest two-day sales.

    A spokesperson for Walmart-owned Flipkart said more than half of all electronics goods purchased by consumers on its platform were in the work-from-home segment, with large-screen televisions, laptops, IT accessories and peripherals witnessing an increase of over 1.4x from last year’s levels.

    How online festive sales fared in first legETtech
    Graphic: Rahul Awasthi

    During the six-day event in October 2019, sales at Amazon and Flipkart touched $2.7 billion (about Rs 20,000 crore), a 30% increase from $2.1 billion in 2018, according to RedSeer’s estimates. Forrester Research, on the other hand, pegged the one-week numbers at about $3.6 billion last year.

    These estimates usually vary as Amazon and Flipkart do not officially give a break-down of their sales numbers for the limited timeframe.

    According to ecommerce companies, top brands and independent analysts, the overall e-commerce industry, too, has grown by 25-30% during the four-day period. The sector is on track to increase sales by 30-36% during the one-week period compared to last year, the early numbers indicate.

    The sales surge in the first four days has come despite lower average discounts by brands this year.

    The maximum discounts were offered in categories that had seen inventories pile up -- such as high-end smartphones, fashion, and furniture. For categories like televisions and home appliances, the discounts have, however, been much lower due to stock shortages.

    Overall, e-commerce sales over the extended 30-day period are expected to grow to $6.5-$7 billion (Rs 48,000 crore to Rs 51,800 crore), according to separate estimates by RedSeer and Forrester Research, which said the numbers would be boosted by new online shoppers. About 75% of festive season sales are recorded in just one week between October 15 and October 21, according to Forrester.

    Industry executives said top brands, including Samsung, Apple, LG and Xiaomi, had seen sales increase by 80-100% across smartphones and consumer durables through e-commerce channels in the four days compared to the same period last year.

    Samsung, Apple and Xiaomi did not officially respond to ET’s emails seeking comment.

    The crucial festive season sale, which begins in October and runs up to Diwali, accounts for 35-40% of annual revenue for most consumer facing companies.

    LG saw a 100% growth in business, led by addition of first-time buyers from tier 2 and 3 towns, and increased demand for premium products across categories, said Deepak Taneja, its India head of online business.

    Business has doubled during the four-day period, said Avneet Singh Marwah, CEO of SPPL, the maker of online-focused TV brands like Kodak and Thomson.

    Marwah added that discounts have been lower this year due to limited stocks a 90-100% increase in TV panel prices globally, which pushed up prices.

    Smartphones, the largest category online, witnessed 2.5X business growth at Amazon during the 4-day sale period this year compared to last year, said Tiwary.

    Average spending on smartphones has gone up during the sale period, with the market skewed towards e-commerce purchases, said Tarun Pathak, associate director at smartphone industry researcher Counterpoint.

    On Snapdeal, the home products category selling kitchen appliances, linen, home décor and LED lights grew 30% over last year, the value-focused e-commerce platform said, overtaking fashion, traditionally the top-performer during the sales period.

    Long-tail categories, including home and home furnishings, have improved as people spend more time at home, it said.

    "Big ticket, one-time purchases are doing well. A lot of people have also moved back to their hometowns and are buying more products across several categories for their family," said Satish Meena, senior analyst at Forrester Research, which has forecast $4.7 billion in sales by the end of the first week.

    The pick-up in sales should not, however, be viewed as green shoots in the recovery of consumer spending, Meena and other industry analysts cautioned.

    “… this spending is coming at the cost of leisure, eating out, and travel expenses being negligible over the last six months… It remains to be seen if it sustains,” he said.

    How long this sales buoyancy will continue is anyone’s guess, although customer sentiment seems a little more positive than expected in the first four days, said Arvind Singhal, chairman of retail advisory firm Technopak.

    “If income reduction continues, discretionary spending will go down. This should not be seen as green shoots that give a fall sense of hope,” he said.

    On the other hand, brands in the smartphone space, like Huawei, Honor and Asus, and TV makers like BPL and Vu – which used to offer big discounts during the festive season to push up sales volumes -- are missing in action this year, industry executives said, alluding to supply chain issues or import restrictions from countries like China.

    Spokespersons for Huawei and Honor said the brands have rolled out offers with equal fervour this year as they did during last year’s festive sales period. Industry executives, however, pointed out that stocks this year have been much below last year’s levels.

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    2 Comments on this Story

    RajTill till32 days ago
    it may be diwali for some hope it is not DIWAALLA for other some .. not borrow to purchase and then suicides Govt is silent on such social obligation Money is getting transferred to cronies !!!!
    RajeshK35 days ago
    The Psychology of Money
    https://amzn.to/317sAG5
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