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E-Commerce Is COVID-Proof; Festive Season Sales Likely To Double According to consultancy firm RedSeer, the GMV clocked by e-commerce firms this festive sales will surge to $7 billion from $3.8 billion in 2019

By Debarghya Sil

You're reading Entrepreneur India, an international franchise of Entrepreneur Media.


The e-commerce industry in the country has been growing since the time Indians have tasted the power of the Internet. Entry of Jio by Asia's richest person further boosted the growth of these companies. During the early stage of pandemic, when the world was assessing the outbreak and was temporarily indoors with the economy going downhill, e-commerce companies were the life support for most of urban India. According to a Unicommerce report, the e-commerce industry in June not only recovered, but also witnessed an order volume growth of 17 per cent.

With the festive season around the corner, e-commerce companies are betting high on their festive season sales. With flashy ads, new product lineups, more delivery executives hired and unprecedented discounts, these e-commerce companies have thrown their hats into the ring to grab more market share and increase revenue.

Festive Season: Happy Company, Happy Customers

The festive season sales over the years have proved to be the busiest and most profit generating sales for these e-commerce companies. With Durga puja and Diwali round the corner, people opt for e-commerce websites to grab on inexplicable discounts. But, the e-commerce industry holds a megre single-digit share in the retail market of this country. However, with the virus at large, and multiple offline stores and brands clinging to e-commerce sites to tide over the incurred loss, online sales are likely to go through the roof.

To go hyperlocal, most of the e-commerce companies have on-boarded SMBs and MSMEs and are also focusing on Tier-II and Tier-III cities/towns.

According to consultant firm RedSeer the gross merchandise value clocked by e-commerce firms in this festive sales will surge from $3.8 billion in 2019 to almost its double at $7 billion.

Though the basket size of online shoppers will be 13 per cent less because of the layoffs, there will be 50 million new shoppers online, thus taking already existing 138 million users to 160 million.

Goldman Sachs in its review of the e-commerce market globally this year said the country's e-commerce industry will touch $99 billion in size by 2024 while the online penetration of retail is expected to hit 11 per cent.

Two Giants

Needless to say, Indian market is heavily dominated by Walmart-owned Flipkart and Jeff Bezos's Amazon. The Bengaluru-headquartered Flipkart currently has a market share of 31.9 per cent followed by Amazon which is enjoying a 31.2 per cent, according to Forrester.

Both the giants have started their festive season sales on the same day showcasing heavy product discounts along with instant price deductions on usage of certain bank's credit/debit cards.

Flipkart in a statement said that it has witnessed more than 36 million new app downloads across the country before the start of its - "The Big Billion Days'. While metro cities like Bengaluru, Mumbai, New Delhi and others continue to lead the demand, there was a 60 per cent of demand from Tier III+ cities. It also said that over 9 million visitors have opted for vernacular interface to avail the new essentials which included products like mobile, electronics, apparels and others. Flipkart said that it has witnessed over 60 per cent rise in digital payment transactions in comparison to non-festive event days. The company said with the help of EMI, the company has seen 65 per cent increase in purchase in mobiles, laptops and white goods. It also observed that there has been over a 40 per cent increase in the number of smartphones purchased and a 50 per cent increase in people availing product exchange.

The company has partnered with over 100 brands this festive season sales to bring over 2,000 fashion stores onto the e-commerce marketplace. Apart from on-boarding new sellers, the company has also trained lakhs of them ahead of their festive sales. The company has claimed that around 70 sellers have become "Crorepatis''.

This year, after the first day of the sales, the company in a statement had said that it has seen a 50 per cent rise in new customers from Tier-III cities, across categories.

An Amazon spokesperson said, "Amazon Great Indian Festival' creates an opportunity for sellers and partners to reach millions of customers across the country.

The company also claimed that they have witnessed a 50 per cent rise in new seller registrations in comparison to pre-COVID times. Customers will be able to choose from 40 million products from sellers from over 20,000 local shops across 100 cities during the sale.

Customers will also be able to buy from 1,100 new product launches during the week's period. As part of the sale, Amazon Fashion has also launched over 10,000 styles from more than 100 brands this festive season/

The Rest

Apart from the two giants, there are others in the space who continue to make their presence felt, for instance Myntra which primarily focuses on fashion. According to the above mentioned Goldman Sach's review, fashion and grocery will be the two drivers behind the growth of the e-commerce industry.

Myntra started its Big Fashion Festival on October 16 and will continue till October 22. Ayyappan Rajagopal, head of business of Myntra told Entrepreneur India that the company has set its highest ever revenue target for this sales. The company for the ongoing sales boasts of offering 900,000 styles from over 5,000 brands. Rajagopal said he is expecting to cater to 4 million "unique customers with about 2X increase in traffic for the seven days'. When asked about comparing the last year's festive season sales with this year, Rajagopal said, "Myntra is expecting to process a much higher volume of transactions this festive season, compared to last year, for a number of factors, the most important being, increased consumer adoption of online technologies in recent times. In anticipation of the massive traffic to the platform, Myntra has scaled its tech capabilities for the Big Fashion Festival, to process 20,000 orders per minute at peak."

The 2010-founded e-commerce company Snapdeal, that claims to have 60 million plus products across 800 categories from regional, national and international brands and retailers, said users from 3,417 towns and cities across India, which is 85 per cent of the towns bought product on the first day of its "Kum mein Dum' sales. According to a PTI report, the company said around 30 per cent of the total orders were received from new customers, suggesting a steady incline in onboarding of new customers. Ahead of the festive sales, the company has added 1,300 new pin codes.

Vijay Shekar Sharma's Paytm Mall has added over 5,500 brands for their "Maha Shopping Festival' .

A Paytm spokesperson said, "While overall demand compared to last year might be tempered, we believe that certain categories including home electronics, work from home essentials, athleisure wear, and home and kitchen products will do well."

The spokesperson claimed that the company has seen a two times growth in sales in specific categories such as groceries, consumer durables, work from home essentials, grooming electronics, toys among others over the last few months. E-commerce has also seen a steady rise in demand from tier-II, tier-III and other corners of the country.

B2B Models

E-commerce players following the B2B model have followed the suit. Akash Hegde, co-founder and managing director of ShakeDeal, a Bengaluru-based e-commerce platform said while the economy will take over an year to recover, the upcoming festive season will provide an outlet for pent up demand.

Launched in 2016, the startup is a B2B e-commerce marketplace for Industrial goods and supplies, office & housekeeping supplies and corporate gifting.

"ShakeDeal is running exclusive offers on numerous brands of Indian origin and we expect the broad-based increase in web and mobile traffic to also translate to an increase in orders for us," he said.

The company is expecting to see demand in categories such as safety, PPE, tooling, FMCD and gifting in the ongoing sales.

However, another B2B e-commerce platform Moglix, which serves industrial products in manufacturing verticals including FMCG, pharma, steel, automotive, and others, has a different story. Despite having their own festive season sales, Rahul Garg, CEO and founder of the company said that impulse buying and discount-led festive season won't impact industrial goods.

Debarghya Sil

Entrepreneur Staff

Former Correspondent

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