The appetite for Diwali sales just seems to have gotten bigger than ever. Online retail companies like Amazon and Flipkart among others have clocked a collective sale of $3.2 billion for the 30-days festive month starting September 20, 2017 until Diwali day on October 19, 2017.
According to a report by research consulting firm RedSeer, in the first round of Diwali sale event that happened in the last week of September, the industry had recorded a sale of $1.5 billion in the previous month.
“For comparison, this would be 45% higher than the 2016 festive month which generated $2.2 billion of sales for the industry in the entire month of September," says Anil Kumar, CEO of RedSeer Consulting. The industry has managed to generate sales to the tune of $2.4billion in September 2017 that includes business on non-sale events. The Diwali sales have grown despite the fact that several companies resorted to surprise sales before July this year, before the government implemented the Goods and Services Tax (GST) for the first time.
One must note that this year, the online retailers had come up with Diwali sale events for the festive season in three parts and registered sales of $1.5 billion alone between September 20 and September 24, 2017. The market had seen some of the biggest annual sales such as Flipkart’s Big Billion Day and Paytm Mall’s Mera Cash Back in the given period. The festive sale between October 4 to October 8 generated sales of around $600 million while additional sales of $600 million was recorded in the last week from October 14 onwards. On non-sale days, the online retailers managed to sustain the momentum and generated $500 million in the month.
Amongst the major players, Flipkart has witnessed in the highest sales in terms of Gross Merchandise Value (GMV) as against Amazon India. A report by Mint suggests that Flipkart has clocked in sales of over Rs 5,000 crore while Amazon India generated gross sales of nearly Rs3,000 crore in its four-day Great Indian Festival sale held in September. The numbers have been disputed by both Flipkart and Amazon with both players claiming to have clocked in higher sales.
According to RedSeer’s assessment, Flipkart group that includes Jabong and Myntra, recorded 2.3 times of business as compared to Amazon with Flipkart enjoying 58% of the total GMV market share over Amazon, which the report claimed, had only 26% while the rest of the online retailers collectively held 16%. As per the report, Amazon saw a dip of 6% in its GMV market share over last year festive season when it had 32%.
This could be attributed to a couple of factors. The prime reason is that consumers were far more aware of the sale events with online retailers ensuring better target selection along with sharp advertising and robust offers. For instance, Amazon did target advertising with Ápni Dukaan’ offer with its core target audience being the older age group. Myntra, a part of Flipkart, too followed a similar concept. Other factors that worked in their favour was a comprehensive logistics set up as well quick customer care redressal. “With high number of exclusives and affordability schemes like EMIs and exchange/buyback offers further accelerating demand,” the report states.
In terms of product categories, the sales were driven by electronics such as mobiles and laptops, appliances and fashion among other.
Kumar notes that the industry has witnessed such a rise in sales because of higher awareness of sales amongst online population. Driven by their sharp advertising, robust offers and flawless execution, etailers have managed to largely match their pre-sales expectations and deliver the biggest sale period ever for e-tailing industry. The high-quality experience of all stakeholders involved in this event indicates the growing maturity of the e-tailing sector and sets up a strong base for enabling robust growth for the sector in the upcoming quarters.”
