Amazon, Flipkart generate Rs 19,000 cr in festive sales, Flipkart takes lead

A report reveals the festive sales earned e-tailers a whooping $3 billion with a large chunk of customers from Tier-2 cities or Bharat.

As festive sales hosted by the e-commerce sector ended last week, the e-tailers in India achieved a record $3 billion (about Rs 19,000 crore) of Gross Merchandise Value (GMV) during the period (September 29-October 4), as per a report by consulting firm RedSeer.

Massively led by Amazon and Flipkart, the e-tailers’ year-on-year growth during the 6-day sale was 30%, said the report, which had predicted a 60-65% growth with a $3.7 billion GMV.

Walmart-owned Flipkart surpassed the Amazon’s GMV share this year holding a 60-62% standalone GMV share during the festive sales and 63% share if other entities are included (Myntra and Jabong), said the report. Meanwhile, Amazon’s GMV year-on-year growth was 22% , and its volume growth rate year-on-year was more than 30%.

Among customers, tier II and III cities contributed a large share in driving the festive sales growth. “The biggest theme of the festive season was ‘value shopping’ as indicated by a large chunk of customers from Tier 2+ cities who shopped online owing to wide selection supposed by affordability initiatives,” said the report.

Prior to the sales, RedSeer had predicted a 60% jump in the number of online shoppers from 20 million last year to 32 million this year, with majority of shoppers coming from Tier-2 cities indicating last-mile deliveries and breaking of vernacular problems.

In a report by ET, Manish Tiwary, Vice President, Category Management, Amazon India had said that events like the Great Indian Festival helped the firm bring the next 100 million customers online, many of these from tier 2, 3 or even 4 towns.

Tiwary had added that, "In the last three to four months, we have witnessed an acceleration in the number of sellers wanting to register, starting from local artisans, weavers to large sellers and brands. In fact, they are lining up new products for the festive season and customers can choose from over 200 million products this festive season." This strategy seems to have paid off.

In the meantime, the report also predicted that willingness among customers to buy mobiles was likely to drop to 40% as compared to last year (55%). However, once again, mobiles appeared as the category king with contributing to over 55% of GMV in the festive days.

Anil Kumar, Founder, and CEO, RedSeer Consulting, said, “The first wave of the festive sale event has seen record GMV of almost $3 billion despite challenging macro environment, indicating that consumer sentiment on online shopping remains bullish. The larger push has come from Bharat customers migrating to online shopping driven by the strong value provided from the online retailers across categories including mobiles, which have shown a strong surge during sale event despite having a relatively slow growing H1 2019.”

As per RedSeer, the whole festive month is expected to generate up to $6 billion or Rs 39,000 crore in sales.