Mobiles and electronic appliances were the major attraction for customers during the first week — October 15-21, 2020 — of the festive season sales this year on major ecommerce platforms, according to a report by industry consultant RedSeer Consulting.
During this year’s festive season sales, which kicked off on October 15 with Flipkart’s early access sale, mobile phones comprised 47% of the total products sold by ecommerce platforms in India.
The report estimates the revenue from product sales for ecommerce platforms during the week-long period to be $4.1 Bn or INR 29,000 Cr, a 52% increase from last year’s figure of $2.7 Bn during the same period.
Other electronics including appliances comprised 28% of the total sales, fashion products accounted for 14% while products in all other categories made up 11% of the total sales in the first week of the festive season this year.
The report highlights that mobile phones have always been the most popular product category during festive season sales on ecommerce platforms.
In 2017, mobile phones accounted for 53% of the total sales during the festive season; 53% in 2018; 48% in 2019; and 47% in 2020. The revenue from sales for etailers during the festive season, from $0.8 Bn (INR 6,000 Cr) in 2017 to $4.1 Bn (INR 29,000 Cr) this year, has grown at a CAGR (compound annual growth rate) of 64%.
The report also contains other interesting insights from the first week of this year’s festive season sales. It says that mobile phones worth INR 1.5 Cr were sold every minute across ecommerce platforms in India. The growth in sales for mobile phones can be attributed to new product launches and affordability factors such as discounts, bank offers and smart upgrade plans of brands.
Flipkart began its six-days-long Big Billion Days on October 16. Amazon, for the first time, has announced a month-long Great Indian Festival which began on October 17.
Govt Incentivises Mobile Phone Manufacturers
Recently, Inc42 reported that the Indian government is looking to boost large scale electronics manufacturing in the country through its Production Linked Incentive (PLI) scheme. Earlier this month, the government approved 16 applicants under the scheme, of which, 10 were approved in the mobile phones segment.
The international mobile phone manufacturing companies approved under the scheme include Samsung, Foxconn Hon Hai, Rising Star, Wistron and Pegatron. Among these, Foxconn Hon Hai, Wistron and Pegatron are contract manufacturers for global tech giant Apple, which is looking to manufacture the iPhone 12 Series in India.
The PLI scheme, notified in April 2020 by the government to lure international companies for setting up manufacturing facilities in India, extends an incentive of 4% to 6% on incremental sales (over the base year) of goods under target segments which are manufactured in India. Eligible companies who are approved for the scheme will receive the incentive for a period of 5 years subsequent to the base year (FY20).
The domestic electronics companies who have been approved under the Mobile Phone segment include Lava, Bhagwati (Micromax), Padget Electronics, UTL Neolyncs and Optiemus Electronics.
Flipkart Tops Amazon In Festive Sales
Meanwhile, the RedSeer report also highlights the lead that Walmart-owned Flipkart has taken over US-based retail giant Amazon. The report reveals that while sales on both Flipkart and Amazon together comprised 90% of the total sales from ecommerce platforms in India during the first week of the festive season, Flipkart captured 68% of the gross merchandise value (GMV) of the two ecommerce companies during the week-long period.
Flipkart had earlier claimed that its ‘The Big Billion Days’ festive season sale saw 1.5x number of transacting sellers compared to last year, of which nearly 35% witnessed 3x sales. The company has delivered 10 Mn shipments with over 3.5 Mn of them delivered by its kirana partners.
Flipkart and its subsidiary Myntra which took a break from October 21 and October 22 respectively after their initial sales, will be resuming their Diwali sales from October 29 onwards for a week.
Regardless of the growth in revenue for Indian ecommerce during this year’s festive season, sellers associations have slammed the bigger ecommerce players such as Amazon and Flipkart for prioritising their preferential network of sellers and not allowing small sellers to benefit from the festive season.