SUMMARY
The Ecommerce Battle Goes Fiercer As Analysts Crowned Indian Unicorn Flipkart The Winner Of Pre Festive Season Sale
The festive season sale organised by online ecommerce behemoths in India is more of a battle rather than a celebration. This year, while Snapdeal was already out of the race and Paytm was just trying to set its foot, the contenders for the top spot were only the Indian unicorn Flipkart and Amazon India.
While Flipkart held its five-day mega event Big Billion Day Sale between September 20-24, 2017; Amazon held the ‘Amazon Great Indian Sale’ for four days, from September 21-24, 2017.
Unlike previous years, this time Flipkart’s war chest is also filled with over $4 Bn investors money, almost nearer to Amazon’s $5 Bn commitment to invest in India. So, right from the start of the year 2017, both the firms did not leave any stone unturned to entice customers with offers as well as new features.
But it was Flipkart that nailed the top spot again. As per a recent RedSeer Consulting report, the ecommerce sector saw highest ever sale performance over the five festive days from September 20-24, 2017.
As stated by Kalyan Krishnamurthy, CEO, Flipkart, “The Big Billion Days is India’s largest shopping festival and we pull out stops to ensure people across the country participate in it to shop for their near and dear ones. Our focus is on delighting customers with the widest range of products across categories at the best possible price, delivered at their doorsteps. The fact that customers prefer and trust Flipkart to buy their favourite products during this time is a testimony of all that.”
Flipkart Vs Amazon: Gap Widens Further In GMV Between 2016-2017
Overall, for these festive season sale days, the RedSeer analysis shows that the etailing industry managed generated $1.5 Bn sales ( INR 9,000 Cr). As compared to $1.05 Bn generated in 2016 edition, this is a y-o-y growth of ~40%.
Further, the chart below shows that Flipkart had a clear lead in the total sales in the 2017 period (even higher than 2016), with its very high consumer brand recall (as per RedSeer research) playing a key role in driving the sales.
While in 2016, both Flipkart and Amazon claimed their ownership for the top spot, this time the gap widens to a greater extent. Flipkart seems to have utilised its acquisitions well leading to improved digital payments, logistics, and tech. Here is the glimpse of Flipkart’s acquisitions so far.
Thus, Flipkart has been successful to a major extent in reducing the end minute glitches affecting online buying experience of the consumers. This time, Flipkart also introduced India’s first anti-theft packaging to secure goods from in-transit theft and tampering. At the same time, the company managed to do vigorous marketing activities throughout the year. The Big 10 celebrations initiated since the start of the year to celebrate the completion of 10 years in the industry also contributed to the mega event of Big Billion Day Sale.
Known for its unusual marketing attempts, this time Flipkart also shared a video created by the Flipsters, to highlight the amount of effort team puts in while conducting the Big Billion Day and the impact it has created in expanding ecommerce in India.
Flipkart Vs Amazon: The Five Day Ecommerce Festive Season Sale Summary
For Flipkart, electronics and smartphones were again the winning categories. As shared by the company with Inc42, it sold 1.3 Mn smartphones within the first 20 hours of the category opening for sale while the total number of Smart Wearables sold on Day 1 is 3X the number of Smart Wearables sold in India on a regular day.
“As a measure of comparison, Flipkart managed to sell three times the number of smartphones sold by the nearest competitor,” as shared in an official statement.
Adarsh Menon, Head – Electronics, Flipkart added, “Flipkart is the leader in this space because we have the widest range of products possible, which ensures customers get what they want across the product and price spectrum, and industry-leading affordability initiative such as No Cost EMI etc which customers have made use of in a massive way.”
Key Big Billion Day Sale Highlights
- Flipkart did sales which equal 70% of the entire online ecommerce market in India.
- The company created history by growing sales by 100% this BBD versus last year
- Flipkart achieved this growth with roughly the same marketing spends as compared to last year, which is a fraction of what the competition has done
- Flipkart has 70% market share in the online smartphones market
- Flipkart Fashion, with Myntra + Jabong, holds 80% of the entire online market for fashion
Amazon, on the other hand, saw a 2.5x growth in smartphones, while large appliances saw 4x growth over last Diwali led by brands like Samsung, Apple, Bosch & BPL. Amazon also claimed to acquire 85% of the new customers from Tier II and Tier III cities. Also, as the stats shared by Amazon revealed, the ecommerce company rake in full benefits from its Amazon Prime launched in July this year.
Key Amazon Great Indian Sale Highlights
- During the first two days of the sale, one in three orders came from an Amazon Prime member.
- Home category clocked highest ever single day sale, growing
- 34X increase in customers who used EMI; 48X increase in usage of no cost EMI
- On Day 1, Buy Now Pay Next Year (EMI Holiday), accounted for 44% of overall EMI’s availed
- Amazon Pay saw a 27X** increase in Top-ups as customers voted for trust and convenience
As Manish Tiwary, VP, Category Management, Amazon India said, “The recently concluded Great Indian Festival has been our biggest shopping event till date. We saw a tremendous customer response across categories – from high value products such as smartphones and appliances to everyday essentials such as shampoos, biscuits and pet supplies!” He further added, “Customers continued to recognise the benefits of Prime and chose to pay for convenience. As witnessed during the previous sales this year, our Prime membership continued to be the highest selling product witnessing a growth of over 4x. During the Prime early access sale, we witnessed a 50x increase in demand for large appliances and TV sale, clearly indicating the engagement level of our Prime members.
Amazon also shared with Inc42, its response in line with recent ecommerce festive season sales stats revealed by various research firms. As Manish stated,
“As a company, we do not comment on financials nor would we like to comment on poorly informed speculative comments and reports for Indian ecommerce industry as recently found in media coverage. Amazon.in remains the largest marketplace and the fastest growing one in the Indian ecommerce landscape.”
In Conclusion
The online festive season sale proves to be a litmus test for all the ecommerce ventures, to ascertain their year-round performance and makeup all the losses, through high volumes of sale, that they may have incurred during the year. 2017 has already witnessed a host of offers due to the introduction of GST before July 2017.
Both Flipkart and Amazon are been engaged into a close race in the Indian ecommerce for a long time now. While Flipkart is currently betting upon new age technologies such as AI and ML to improve its tech and payments; Amazon is continuously improving upon its logistics. Just recently, it opened its 41st fulfillment centre in Jamalpur, India. Further, Flipkart is also set to enter into Smartphone Recommerce, by this Diwali.
Despite incurringmultimillion-dollarr losses in the past, Amazon has been bullish about its expansion in India and shows no plans to back down. Perhaps, this is why, the Indian arm of the US ecommerce giant is back with its festive season sale from October 4. Will Flipkart again took part in this race? If yes, the battle would be worth watching.
