According to data from Redseer Consultancy, e-commerce companies such as Walmart-owned Flipkart and Amazon sold merchandise worth almost $4.1 billion (~29,000 crores) in the first week of festive season sales, compared to $2.7 billion in 2019.
Smartphones continued to be the largest segment, accounting for 47 percent of the total gross merchandise value ( GMV), led by electronics and home appliances, said the market research and advisory company, as demand for work-from-home products increased.
Usually, during festive sales, Flipkart Group and Amazon together make up 90 percent of GMV. Players like Snapdeal, Paytm Mall, and others take up the remaining 10 percent.
Smartphones are the first group that attracts dormant e-commerce customers at any festive sale because of the discounts provided by online commerce. It is no wonder that this was the theme even this year. Affordability and loan items, however, added to the mix in driving smartphone sales, “said Mrigank Gutgutia, e-commerce director, Redseer.”
As offline retail continues to reel from the impact of the pandemic, the rise in sales is attributed to new buyers, as well as significant numbers of shoppers from smaller cities turning online. In the first week of festive sales, nearly 52 million shoppers flocked to e-commerce websites with 57 percent or 31 million buyers from smaller cities and towns.
As overall metro shoppers declined from 30 percent in 2019 to 25 percent in the first week of the 2020 festive sales, the reverse migration of metro customers to smaller cities boosted demand from these cities.
For Flipkart, this festive season, 65% of new shoppers came from smaller cities, while Amazon India witnessed 91% of new shoppers in small towns making purchases within the first 48 hours of its sale.
It is likely to see demand spike from tier-2 city shoppers in consumer basket sizes, with average spending falling slightly this year. Though tier-2 cities are still taking baby steps and ordering small-ticket sizes, the largest contributors continue to be metro customers, accounting for 45% of overall GMV, Gutgutia said.
This year, average consumer spending fell slightly to 5,500 from 6,800 last year.
On 16 October, along with Myntra’s Big Fashion Festival, Flipkart kicked off its Big Billion Days (BBD) sale, while a day later, Amazon began its Great Indian Festival sale. During BBD, Flipkart saw an increase of almost 3.2x in premium smartphones, along with a 30 percent increase in consumer acceptance for product exchange compared to BBD 2019. Amazon India has said that its highest-selling segment continues to be smartphones.
This festive season, the fashion segment saw a rebound, accounting for 14 percent of total GMV versus 17 percent during the last festive season sale, while formal wear and ethnic party wear were affected as individuals worked from home.