Amazon, Flipkart Kickstart Festive Sales With Full Fervour, See Growth In Tier-2 Cities

Ecommerce majors Amazon and Flipkart have kickstarted their annual festive sales with a bang, with both the companies seeing robust growth in sales. With the effect of the pandemic waning and a majority of the country’s population vaccinated, the ecommerce marketplaces are looking at a high-growth festive season this year.

Amazon India’s ‘Amazon Great Indian Festival 2022’ and Flipkart’s ‘Big Billion Days Sale 2022’ began on Friday. Moreover, Amazon gave early access, from September 22, for the sale to its paid users or Prime members.

Amazon Sees Growth In Prime Members 

Amazon reportedly sold 10 lakh unique products offered by small and medium businesses and startups on its platform during the first 36 hours of the festive season sale. 

The number of Prime members grew 1.9 times compared to last year. Interestingly, 68% of the total new Prime sign-ups were from Tier-2 and 3 cities. 

While electronics and smartphone segments have traditionally driven the festive sales, this year television brands such as Samsung, OnePlus, Mi, LG and Sony were in high demand on the platform, according to media reports. 

The Amazon Business segment saw 50% growth in customers, more than 100% jump in orders, and more than 200% jump in sales over the last year. Besides, it saw two times growth in the customers placing bulk orders for their business or corporate gifting needs.

With the beginning of its much-awaited festive season sale, the ecommerce giant also expanded its four-hour delivery services to Prime members in 50 cities across India from 14 cities earlier.

‘Flipkart Pay Later EMI’ Grows 12X

Amazon’s archrival Flipkart reportedly recorded 1.6 Mn concurrent users per second on the first day of its festive season sale.

Categories such as mobiles, large appliances, fashion, furniture, and home appliances saw the greatest interest and demand among buyers in the early phase of the sale, the company said.

Besides, it also claimed that it saw a healthy growth in the number of ‘Flipkart Plus’ customers using ‘early access’ during the sale as compared to last year. The company also said that the majority of these customers were from Tier-2 cities and beyond.

Its ‘Flipkart Pay Later EMI’, which offers pre-approved credit for shopping, saw a 12X growth in adoption on the first day of the sale.

This year, the Walmart-owned ecommerce platform has also announced a sale event on its digital B2B marketplace, Flipkart Wholesale, for its ‘kirana’ members. This sale, scheduled to run between September 23-September 30, aims to extend the benefits of the sale to small retailers and kirana members by giving them an opportunity to save more and increase profits.

Record Sales Expected

In 2021, Amazon and Flipkart accounted for nearly 90% of the $9.2 Bn worth festive sales, according to a RedSeer report. The total online sales during the 2022 festive season are expected to reach $11.8 Bn, as per the consulting firm.

While the last two festive seasons saw high growth in mobile and electronic appliances, the fashion category saw subdued demand due to the pandemic. However, the fashion category is expected to see a resurgence this year, while the mobile and electronic appliances are projected to continue their growth trajectory. 

With the rise in the number of smartphones and the penetration of the internet, the Indian ecommerce market has seen rapid growth over the last few years. Over 165 Mn Indians shopped online in 2022, and this number is expected to surge to 350 Mn by 2025, according to an Inc42 report. A majority of online shoppers are expected to start their online journey with fashion as a core category, particularly in cities beyond Tier-2.

Flipkart and Amazon dominate the ecommerce market in the country currently, but both the companies are under government scrutiny for violation of competition laws, favouring their own sellers, among other reasons. 

While the government seems to be tightening the screws on violation of laws, its Open Network Digital Commerce (ONDC) initiative is further expected to challenge these behemoths. The ONDC aims to address the gaps in the ecommerce market and create an inclusive digital commerce ecosystem.