A June 2018 report expected Indian retail ecommerce sales to increase 31% to reach $32.7 Bn in 2018. The report was put to test during the recently concluded sales of Amazon and Flipkart— Prime Day and Big Shopping Days, respectively.
Amazon Prime Day was hosted for 36 hours on July 16-17, while Flipkart hosted Big Shopping Days for 80 hours from July 16-19.
The Big Shopping Days sale was Flipkart’s second sale event since the announcement of Walmart acquiring 77% stake in the company in May 2018. After its four-day Big Shopping Days sale held from May 13-16, Flipkart claimed in a media statement that it enabled 300 sellers to become millionaires.
Two Deep-Pocketed Players, Two Big Sales
During Big Shopping Days sale 2018, Flipkart claimed to generate four times its daily revenue and sell 2.5 times the daily units it sells on an average.
The 80-hour event generated sales equal to 15 non-sale days in terms of transaction value and sold as many units as 10 non-sale days. Also, the company claimed that traffic on the Flipkart platform increased by 150% of its daily traffic.
However, the Amazon Prime Day sale was something new for India.
Bringing its global event Prime Day to India for the first time, Amazon India offered 200 exclusive new product launches, thousands of deals, and video and music selections especially curated for Prime Day. The Prime Day offers stretched further for one week on Prime Music and Video as well.
The research company RedSeer has analysed customer perspective to these sales.
Here are a few highlights from the customer front:
- Awareness of the Amazon or Flipkart sale is 60% compared to 100% in BBD/Great India Sale last year
- Flipkart has a 60% mindshare during sale days compared to 40% for Amazon
- 59% of respondents have bought on Flipkart while 41% have bought on Amazon (10% overlapping on both)
- 68% of the respondents knew about the sale through low-cost digital channels
- 39% of the customer purchased consumer electronics on Flipkart followed by Fashion while 35% of the customers purchased Fashion on Amazon followed by Mobiles
- 60% of the consumers on Flipkart spent more than INR 5000 during the sale, while 70% of the consumers on Amazon spent more than INR 5000 during the sale
- The use of PhonePe was 13% of the total payments on Flipkart while 9% of Amazon customers used Amazon Pay
So, Who Nailed It: Flipkart Or Amazon India?
Amit Agarwal, senior vice-president and country head, Amazon India, said, “Extending Prime Day to 36 hours this year allowed us to further reward members with unbeatable deals, access to exclusive new products, and unforgettable experiences that highlight the many benefits of a Prime membership. We also want to thank our sellers, brands and our content partners who helped to make Prime Day bigger and better.”
To be noted, members streamed music in 18 Indian and international languages on Prime Music in the week leading up to Prime Day. The week leading up to Prime Day was Prime Video’s best ever, with the highest number of streamers in India ever, as claimed by the company.
On the other hand, according to Smrithi Ravichandran, Senior Director, Flipkart, “During Big Shopping Days, the success of the sale is a testimony to our customer’s faith in us, making us as the destination where India shops. We are overwhelmed to see the RedSeer survey findings that reinstate our commitment and celebrate this success.”
Some of the unconventional categories that were a great success during this sale included Furniture and IoT other than the hot categories like mobiles, fashion and appliances, she added.
Amazon Vs Flipkart: Expanding Product Categories
Recently reports surfaced that Flipkart is working to triple its warehouse workforce for upcoming festive season sale Big Billion Days.
Following the Walmart acquisition, Flipkart has been increasing its commitment to the Indian market with several new initiatives, including a foray into fintech for which it has sought NBFC certification. Flipkart has also set its next target — a gross merchandise value (GMV) of $17.6 Bn by 2020-21.
It must also be noted that a Forrester report had recently revealed that Flipkart’s standalone market share was estimated to be 31.9% at the end of 2017 while Amazon India’s was 31.1%.
Amazon had started out in India with a 14% share in 2015 against 43% of Flipkart. Citi Research estimates that Amazon India is currently in second place in the Indian ecommerce market with about $5 Bn in GMV.
A Citi Research report had said that Amazon India is expected to reach $70 Bn in gross merchandise volume (GMV) and $11 Bn in net sales by 2027. The same report valued Amazon India at $16 Bn.
At the same time, Flipkart has been expanding its bets on grocery, fashion, furniture etc as the company expects about 45% ($7.4 Bn) of its 2020-21 GMV target to be contributed by mobile phones, followed by large appliances and fashion at $2.7 Bn and $2.6 Bn, respectively. Groceries are expected to contribute another $1 Bn.
As the festive season sales preparations start for the ecommerce giants, customers can buy an increasing range of products on these platforms. But though the ecommerce giants may entice online shoppers with such sales, will they be able to taste the real success that comes with balance sheets showing profitability in this financial year?