Credit by Aditi Shrivastava
Data shared by both marketplaces indicate that most of these shoppers used some kind of financial affordability construct like EMI or product exchange offers to make purchases, especially on electronics
India’s largest ecommerce companies Flipkart and Amazon said their festive sales have surpassed estimates on the opening day on Sunday, primarily boosted by new product launches, steep discounts, and bank offers of loans and no-cost EMIs.
Data shared by both marketplaces indicate that most of these shoppers used some kind of financial affordability construct like EMI or product exchange offers to make purchases, especially on electronics.
Flipkart said customers opting for affordability options spent 2.5 times more than other customers, while Amazon said the number of customers opting for EMIs doubled and 75% of them were from smaller towns and cities.
People from smaller towns and cities, who were otherwise holding back purchases, especially at full-price, due to the country's sluggish consumer sentiment, look at these festival sales to buy products owing to discounts and affordable EMI constructs, experts said.
Over a third of electronics on Amazon were purchased under product exchange programmes, while three out of four customers availed no-cost EMI offers, the company said.
“Our penetration keeps going up every year,” said Amit Agarwal, global senior vice president & country head at Amazon India. “Fashion grew five times over last year and attracted the most new customers, followed by smartphones.”
Top three premium smartphone brands Samsung, OnePlus and, Apple accounted for Rs 750 crore in sales in one day, while Amazon’s own product Echo Dot was the most sold product on the site.
Domestic online retail players are collectively expected to clock almost $4.8 billion in sales during the entire festive period, as per Forrester Research.
“There is no doubt that ecommerce has lifted consumer sentiment,” said Kalyan Krishnamurthy, group CEO at Flipkart.
Flipkart said the number of transacting customers from tier two cities and beyond have doubled over last year sale period, adding that travel has emerged as the fastest growing category on the platform.
ET could not independently verify the authenticity of the numbers shared by the ecommerce firms. However, three brands that ET spoke to indicated a spike in orders. “We overshot our sales estimates on both marketplaces (Amazon and Flipkart), witnessing a 7X spike in order volumes,” said Manish Chowdhary, CEO at Wow Skin Care. “Early data shows this was a mix of our loyal customer base who purchased routine products plus tried out new launches, and new customers who bought our flagship product range.”
The annual festive sale is the first large event for Flipkart and Amazon after the implementation of revised ecommerce policy that bars online marketplaces from owning their vendors and prohibits them from controlling the inventory sold on their platforms.
The boost in sales comes in at a time when the GDP growth rate has slipped to 5% in the first quarter of FY20, the lowest in over six years, in part is driven by the weakening of household spending that forms nearly two-thirds of the GDP for the country.