Small Towns Help Flipkart Extend Lead Over Amazon In Festive Sales Battle
Walmart Inc.-owned Flipkart extended its lead over Amazon Inc. during the first week of online festival sales fuelled by record number of first-time buyers and sellers from small towns.
The ‘Big Billion Days’ by Flipkart group, including Myntra and Flipkart.com, accounted for 68% of the overall sales in the first week (Oct. 16-21), according to Redseer Consulting. High share of tier-2 shoppers and wide product offerings, the consulting firm said in a report, helped the online retailer maintain its leadership.
Amazon, which hosted the ‘Great India Festival’, could only capture about 32% of the total gross sales during the period. The U.S.-based e-commerce firm, for the first time this year, has extended the event to a month against the usual practice of holding up to three sales leading to the Diwali festival.
Online shoppers have nearly doubled over last festive sales to 52 million this year. About 60% of the shoppers, or 30 million, came from tier-2 and beyond towns, Redseer said. But that lowered the overall average order value to Rs 5,500 from Rs 6,800.
The festive season sale is crucial for e-commerce firms as they generate nearly a third of their annual sales from this event. And the first week accounts for 60% of the overall festival sales done. This year e-commerce firms, according to a separate report by Redseer, are expected to ratchet up nearly $7 billion in the overall festive sales.
“This was the year of tier-2 shoppers and Flipkart has been able to accelerate its strength and garner more market share, compared to Amazon, which is stronger in metros,” Mrigank Gutgutia, director (e-commerce) at Redseer Consulting, told BloombergQuint. The sales event, Gutgutia said, also showed that there is a lot of unsatisfied demand in the market from new and existing shoppers.
An Amazon India spokesperson refused to comment, citing speculative reports without transparent methodology. Flipkart has yet to respond to BloombergQuint’s queries.
Flipkart, according to a report by Apptopia, clocked around 3.5 million new app installs this year, a 71% jump from last festive season. That compares with Amazon’s 77% rise in new app installs to nearly 2.5 million during the period.
“This (new app install) is likely due to more people staying at home out of precaution for the pandemic,” Apptopia report said.
Online Festive Rush
Overall, Flipkart and Amazon continue to dominate the Indian e-commerce landscape. Paytm Mall and ShopClues, too, continue to grow. Snapdeal has been striving hard to increase its market share and, according to its statement, is seeing increased participation from offline sellers and small town consumers.
Flipkart Group and Amazon accounted for more than 90% of the total gross sales of around Rs 29,000 crore ($4.1 billion) during the first week of the online festive sales, Redseer said. That’s a 55% year-on-year growth.
Smartphones continued to dominate the online sales, as they accounted for 47% of the total sales in the first week.
Other electronics and appliances garnered 27% of the sales, up from 25% a year earlier, the Redseer report said.
In the upcoming sales event, however, Gutgutia said the category mix might not be same. “The first season was heavy on electronic appliances and smartphones; the next billion might see a slightly higher share of fashion and other categories.”