Amazon, Walmart Find Success in Rural India During Sales Season
Both focused on expanding their online commerce to smaller cities and rural areas, an enormous swath of the country.
(Bloomberg) -- Amazon.com Inc. and rival Walmart Inc. reported record revenue for their six-day India sales festivals as e-commerce catches on with buyers and sellers in smaller Indian towns, moving beyond the country’s urban, English-speaking population.
The American competitors have been dueling in India since Walmart cut a $16 billion deal for control of local pioneer Flipkart Online Services Pvt last year. Their latest sales -- which Amazon calls the Great Indian Festival and Flipkart calls Big Billion Days -- are a high-stakes battle that ran on the same days and concluded over the weekend.
Both focused on expanding their online commerce to smaller cities and rural areas, an enormous swath of the country known by its historic name of Bharat. Neither company gave specific revenue figures, though they claimed record activity.
“This has been our biggest celebration ever, a digital Bharat festival,” said Amit Agarwal, Amazon’s India chief, during a telephone call from his Bangalore headquarters. “Over 65,000 sellers from 500 cities sold products.”
Millions of Indians are moving online thanks to inexpensive smartphones and some of the lowest wireless data rates in the world. That is boosting all kinds of internet businesses, from streaming video and online gaming to e-commerce and services.
“There is a big wave of consumers in Bharat shifting their offline spending to online during these sale days, and increasing the ticket size of their purchases,” said Satish Meena, a senior forecast analyst at Forrester Research Inc. “Online retailers have been efficiently getting their message about the discounts, the product assortment and affordable credit offerings to the internet users in small cities.”
Flipkart said in a note that it recorded almost 50% growth in new customers compared with last year’s sale days, and a 100% increase in units sold to shoppers in small, so-called tier 3 cities. More than 40% of sellers during the sale days were from Tier 2 cities and beyond. “Bharat has moved closer to India in more ways than one,” Kalyan Krishnamurthy, Flipkart’s chief executive officer, said in a statement.
Agarwal said Amazon succeeded in attracting not justbuyers but also small and medium sellers hawking local, or “desi,” brands. Among the top-selling brands were Ganesh vegetable choppers, local makers of treadmills and Boat, which makes earphones and other mobile accessories.
“A huge opportunity lies ahead as this sale event demonstrates,” Agarwal said. “It’s a long journey, and we are taking a 10-year-view as India will have the largest internet population in the world.”
To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.net
To contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Vlad Savov
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