SUMMARY
Smartphones drove the sales during the first four days of the festive season, and 1 Cr handsets are expected to be sold in the first week of the festive sale
The fashion category has made a strong comeback this year and saw a 4X jump in sales in the first four days
Average user spending stood at nearly INR 5,200, a sharp decline from pre-COVID times
The ecommerce platforms in the country registered total sales of INR 24,500 Cr ($3.5 Bn) during the first four days of the festive season sales for 2022, almost 1.3X higher than last year, consulting firm Redseer said.
Online sales are expected to grow 28% year-on-year to INR 41,300 Cr during the first week of the 2022 festive sales, the first festive season out of the shadows of the pandemic in 3 years.
In a report released on Tuesday, RedSeer said that ecommerce platforms are clocking sales worth INR 6,000 Cr per day during their festive sales this year, a 5X jump from gross merchandise value (GMV) of INR 1,200 Cr on the non-sales day.
Despite this, the average user spending has remained stagnant during the festive sales this year at INR 5,200 as compared to last year, RedSeer said. The average user spending is nearly 30% lower than INR 6,750 in the 2019 festive season and over 41% lower than INR 7,350 in the festive season of 2018.
Ujjwal Chaudhry, partner at Redseer, told Inc42 that the decline in average user spending can be attributed to the impact of Covid-19 on purchasing power and higher constitution of low-ticket size products from fashion and home decor categories in the user carts as against just mobile phones earlier.
While Amazon and Flipkart continue to see the highest amount of sales this festive season, Reliance’s Ajio and Meesho have also consolidated their share in the overall sales. However, the firm did not disclose the market shares of the platforms in the overall sales.
Non-metros are driving around 80% of the total ecommerce sales this year, with Tier-II towns and beyond contributing to 60% of the overall sales.
Smartphones Driving Festive Sales
Smartphones continue to remain the hot favourite item for festive shopping and contributed over 47% to overall sales in the first four days of the festive season. As per Redseer, ecommerce platforms sold 60-70 Lakh units of mobile phones worth INR 11,100 Cr in the first four days of the festive season.
Ecommerce platforms are forecasted to sell 1 Cr phones during the first week of the festive season, a nearly 10X growth from the average days (non-sale days).
Notably, premium-end smartphones like iPhone 12, 13 and OnePlus are driving sales this year. During the last few festive seasons, the mid-priced smartphones were hugely popular owing to the discounts on offer.
Chaudhry said that unlike last year, the concern over “country of origin” of products, particularly for smartphones, isn’t a major focus this year, although on average the buyers do prefer ‘Made in India’ products when it comes to shopping from online marketplaces.
Interestingly, the fashion segment has made a huge comeback with a 4X jump in sales to INR 5,500 Cr during the first few days of the festive season.
Number Of Online Sellers Up 2X
The zero-commission policy by platforms like Meesho and Shopify, and the slashing of seller commissions by ecommerce giants like Amazon have led to a 2X growth in the number of sellers on these platforms to 8-10 Mn this year.
However, according to Chaudhry, this has also resulted in higher competition amongst online sellers and brands this festive season. Although the brands decide on discounts, the sellers have to spend more on advertising and other costs which may hit the margins.
With the draft ecommerce policy (2020) advocating seller democratisation by disallowing deep discounts, and preferential treatments of sellers, among others, experts believe that the Open Network for Digital Commerce (ONDC) has the potential to help online sellers reach the target markets in a cost-efficient way and increase their sales. Ends
