More reports on: Retail, Marketing

Festive sales for ecommerce firms to be '50% more than last year'

20 September 2017

It is bonanza time for shoppers as India's online retailers vie to offer the widest range of goods, deep discounts and cashbacks during the annual festival sales that began today with market leader, homegrown Flipkart's Big Billion Day sale.

Close rival, US-based Amazon launches its Great India Festival Sale tomorrow. Altogther, ecommerce firms are estimated to garner cumulative sales of Rs15,000 crore in the coming weeks, according to an Economic Times report citing industry analysts.

Flipkart has tasked executives with registering a lead of ''70-30'' over Amazon India, while Amazon has promised to fight with the force of ''two Amazons'' from last year, setting the stage for an epic battle that will also see action from new entrant Alibaba-backed Paytm Mall, as well as Snapdeal and ShopClues.

''Our CEO (Kalyan Krishnamurthy) has told us nothing less than a 70-30 (lead over Amazon) will do,'' Smrithi Ravichandran, senior director at Flipkart, told ET. The firm aims to triple gross sales from its five-day event to $1.5 billion.

In 2016, Flipkart had captured 43 per cent of the ecommerce market during the festive sales, according to RedSeer Consulting, while Amazon India was able to snag about 32 per cent, ET reports.

The online festive sales - now a dominant feature of ecommerce growth in India since Flipkart first launched its Big Billion Day Sale in 2014 - are not just markers for industry leadership but also stoke growth for allied industries from logistics to digital payment providers.

Payments industry executives expect total sales generated by the ecommerce industry in the next few weeks to be at least 50 per cent more than last year. ''It could reach Rs15,000 crore,'' M N Srinivasu, director of payment company BillDesk, told ET.

Logistics companies have also expanded their network to help online retailers reach more pincodes. ''We have added 7,000 pincodes in the last six months and are trying to be in locations where we expect demand,'' said T A Krishnan, CEO of logistics company Ecom Express, which works with various ecommerce players.

Total industry shipments per day during the peak sale season is estimated to be 5 million, a steep jump from the 3-million shipments last year, according to Krishnan. Flipkart, which is expecting 12-lakh shipments per day during the BBD sale and for several days after, will work with approximately 40-45 logistics partners apart from its in-house logistics arm Ekart, according to an industry executive cited by ET.

Both Flipkart and Amazon are also looking to speed up deliveries and reduce delivery time by at least a day. Analysts from Forrester and RedSeer estimate the main sale days for Flipkart and Amazon India could deliver gross sales of $1.5-1.7 billion.

Other players like ShopClues and Snapdeal are hoping to cement their positions this season. For Snapdeal, which has lost a big chunk of market share from 25 per cent during the sale in 2015 to 9 per cent in the festive season of 2016, according to RedSeer data, this year's festival sales are likely to be crucial.

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