Festive cheer for e-commerce players: online festive sales gaining pace

With scores of Indians gearing up for the festive season, the annual festive sales launched by e-commerce firms already seemed to have gathered steam. Initial estimates shared by companies suggest that small-town India is fast catching up with the metros in terms of grabbing a bigger share of the shopping cart.

For Flipkart, nearly 45% of the customer demand has come from tier three cities and beyond. In a statement issued earlier in the month, the company said that cities such as Patna and Lucknow led consumer demand alongside top metros. The sale event also gave the Walmart-owned firm considerable room to add sellers from over 100 new regions including Maharashtra’s Hingna, Kerala’s Attingal and Uttar Pradesh’s Baghpat. Flipkart’s flagship The Big Billion Days sale event will run for eight days ending October 10.

Consulting firm RedSeer estimates e-commerce companies to clock in about $9 billion in gross merchandise value (GMV) during the festive season sales this year. Firms are projected to make as much as $4.8 billion in sales in the first week of the festive sale events, an increase of nearly 30% over last year. Although online festive sales typically commence before Navaratri and continue in phases till Diwali, companies get the bulk of the orders during the first leg of the sales.

Kunal Bahl-led Snapdeal registered close to 43% of its orders from tier-three cities like Dhanbad, Gorakhpur and Guntur while users from areas like Aizwal, Ajmer, Silchar and Bikaner made a rush for online platform Myntra that claims to have garnered almost 40% of its orders on day one of its sale from tier two and three towns.

The rising share of small-town India to the e-commerce mix is not a one-off event. The trend was observed last year as well. Cheap data tariffs and a deluge of affordable smartphones have enabled more Indians to move online, aiding the growth of e-commerce. In fact, with 140 million online shoppers at the end of 2020, India is only behind China and the U.S., according to analysts at Bain & Company. To bring more users into the digital fold, companies have also been stepping up efforts by way of making the apps available in varied local languages, introducing voice capabilities and widening the delivery network. Flipkart, for instance, has made its app available in 11 Indian languages for this edition of The Big Billion Days. “E-commerce is gaining increasing acceptance among the masses, and it is evident that user-friendly technical and financial constructs are helping to drive its adoption,” said Nandita Sinha, Vice-President, Customer and Growth at Flipkart.

E-commerce behemoths Amazon and Flipkart have been investing billions of dollars in India which makes for a lucrative market with a young workforce and rising disposable incomes. Amazon expanded its fulfilment network in India this year—increasing its storage capacity by 40%. The e-tailer also launched new delivery stations in states like Assam, Gujarat and Karnataka.