Home grown e-tailer Flipkart has surpassed Amazon India by a huge margin in the latest five-day festive season sales on the back of higher purchases in mobiles and fashion verticals, general merchandise and exclusive launches, once again highlighting the fierce battle for supremacy that’s going on between the arch rivals.
While the just concluded festive season sales set the cash registers ringing for both e-tailers, Flipkart, which was recently acquired by U.S. retail giant Walmart, accounted for more than half of GMV (gross merchandise volume) for the entire industry, according to its own estimates and those of RedSeer Consulting, a research and advisory firm focused on the consumer internet market.
“Between Flipkart and Amazon, the share was 62-38. Higher share for Flipkart was driven by higher sales in both mobiles and fashion verticals,” RedSeer said.
Substantiating its market position, Flipkart says its internal review indicates that its share was in the tune of 68-70%, not just 62%. “Over the last five years, the Big Billion Day sales have seen a growth of 12x. Our ambitions are much bigger for next year when we take into consideration the kind of demand and response we have seen this year for our offerings and products across the board,” Smrithi Ravichandran, senior director, growth, at Flipkart, told Fortune India exclusively over a call.
For Flipkart, a surprise boost in sales came from gross merchandise and home categories, which is typically considered to be the domain of Amazon India. “This year we have taken a larger share in the gross merchandise and home categories. Also, consumer appliances and electronics did well for us, contrary to reports that say consumer electronics lagged behind expectations (for e-taliers). The sales of laptops, Apple MacBooks and cameras were unprecedented,” says Ravichandran.
As a large part of its festive sales strategy, Flipkart was working on creating a line of exclusive launches over the last three months. The sales period saw several exclusive launches such as gaming laptops, mobile phones, international fashion brands, which launched new ranges only for the Big Billion Day sales, and home appliances, such as front load washing machines that were priced below ₹10,000.
“The velocity of sales due to these exclusive launches was very high,” says Ravichandran.
E-tailers generated their highest ever sale performance over the five festive days (Oct 9-14) and the industry managed to generate sales worth $2.3 billion compared with $1.4 billion generated in 2017, up 64%, says Redseer.
“60%+ growth compared to last year bodes well for the industry. The festive sales mark the beginning of festive period and customers are excited by the anticipation of more offers during the season. Mobiles and consumer electronics continue to account for more than 75% of festive sales. This year saw higher participation by fashion shoppers which made it the fastest growing vertical,” says Ujjwal Chaudhry, engagement manager at RedSeer, in a statement.
According to Chaudhry, the higher growth is driven by multiple drivers, the key being a larger shopper base from Tier-2+ cities. “Affordability and loyalty schemes introduced by e-tailing players also played a huge role in converting the visitors into shoppers,” he says.
Over the years, festival sales have emerged as the single biggest window of revenue generation. To be sure, in the last three years, sales – or gross merchandise volumes – during the festive season have nearly quadrupled. They stood at $0.7 billion in 2015 and rose to $1.05 billion the following year.
For Amazon too, it an important business event. Though it disputes the RedSeer estimates, it did not share any actual sales numbers. “We cannot comment on speculative reports that lack robust and credible methodology,” said an Amazon spokesperson in response to a query sent by Fortune India.
Amazon says its gross sales nearly doubled this year and the company saw its biggest Great Indian Festival celebration, with record sales across popular categories in the sale period from October 10 – 15 preceded by a 12-hour prime early access.
“We have received an overwhelming response to the 5th Great Indian Festival, with sales in the first 36 hours nearly surpassing entire first wave last year and the event exceeding our most aggressive plans across all categories. With 3x times surge in Prime member signups across the country, more than 80% of new customers coming from small towns, and orders from 99% of serviceable pin-codes in just 4 days, we are humbled that Amazon.in is trusted by India to find, discover, and buy anything online.” said Amit Agarwal, senior vice president and country head, Amazon India, in a statement.
More than 82% new customers who came to the Amazon website during the latest Great Indian Festival were from smaller towns and cities. The Hindi website also worked in the company’s favour. New customers through this platform grew by 2.4x over a normal business day.
When it comes to products, home and kitchen appliances grew five times year-on-year driven by strong growth in water purifiers, mixer grinders and water heaters category. Amazon India says it sold one mixer grinder every four seconds and one iron every 10 seconds during the first 2 days of the sale event driven by brand like Prestige, Bajaj, Philips and Lifelong. Sales of cookware and dining grew six times as compared to last Great Indian Festival, driven by growth in gas stoves and kitchen containers. Meanwhile, furniture segment’s sales quadrupled compared to last Diwali driven by sofas, beds, mattresses and dining sets.
Fashion, where Amazon clearly lacks behind Flipkart (Which has its own fashion business and verticals like Myntra and Jabong) also did well. Amazon Fashion had its biggest celebration ever, it more than doubled over the first phase of the Great Indian Festival last year. Top brands on Amazon Fashion spiked exponentially with key brands clocking extraordinary growth over normal business. Brands like W for Woman, Bata, Clarks, Pepe Jeans, Casio, Puma, Titan and Shoppers Stop sold close to ten times or more, compared to daily business.
“We will continue to offer the best selection and biggest deals on our entire selection – from the most sought after smartphones, TVs, appliances to fashion, home & kitchen products, consumer electronics and more,” said Manish Tiwary, vice president – category management, Amazon India, in a statement.
This year, day-2 of the 5-day sale was the biggest in terms of GMV as it saw the launch of multiple new exclusives in mobile phones and offers on other platforms as well. Post second day, the growth of GMV stalled a bit with last three days accounting for only 42% of sales compared to 60% in the first two days, according to RedSeer. The same trend has been observed in the past years as well and indicates the customers’ intent to buy before the sale starts.
For now, it seems, Flipkart is in the top league but the deep-pocketed Amazon India will not sit behind quietly. With its acquisition of food and grocery retail chain More, and media reports suggesting that it may acquire a stake in Future Retail, Amazon may well be planning its next big move, which would definitely go beyond the festive sales.