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Ecommerce festive sales temper down after big September 22 surge
Ecommerce platforms are showing signs of easing demand after a strong start to flagship festive season sales events launched last week. Industry executives, brand founders, and analysts are however hopeful that demand will rebound in the run-up to Diwali festival.
Sales in the week starting September 22 accounted for about 51% of the total expected festive sales this year, generating about Rs 60,700 crore in gross merchandise value (GMV), according to data from ecommerce consultancy Datum Intelligence shared with ET. This marks a 29% rise in the first week of sales compared to the same period last year.
GMV is the total value of goods sold on ecommerce platforms, excluding discounts and returns.
Notably, nearly a third of the gross sales clocked during the week happened on the first day of the sale events on September 22 – when Amazon launched its Great Indian Festival sale for its Prime customers, and Flipkart's The Big Billion Days event went live for its loyalty programme users.
ETtech
In comparison, online retail sales in India surged 32-35% in the first two days of festive sales, helped by the roll out of reduced goods and services tax (GST) rates on several items, in addition to heavy discounting by ecommerce marketplaces, ET reported on Wednesday.
“After the surge in sales on Day 1, we saw a dip on Day 3. It was almost 70% of the sales on the first day,” said Satish Meena, founder, Datum Intelligence. “So, there was a slowdown between Wednesday and Friday in the first half since these were weekdays.”
The decline follows a Day 1 buying spree by shoppers who had postponed purchases until the GST rate cuts were rolled out, leading to a surge in orders when the festive sales began.
Analysts however noted that ecommerce spending had already been on an upward trajectory since March, after a prolonged slowdown.
“The demand peaks for the first two days significantly, post which it settles down a bit. It's still higher than BAU (business-as-usual) demand and we expect this to sustain till Diwali now,” said Anurag Kedia, co-founder of personal care brand Pilgrim. “In between there might be some spikes, but the two big days are now past us.”
Echoing Kedia, fashion handbag and accessories brand Miraggio founder Mohit Jain noted a slight tapering compared to the initial two-day surge but said the overall numbers remain strong. It is currently seeing a 110% growth year-on-year (YoY).
Deals and demand
A Flipkart spokesperson said the momentum has held steady beyond the opening burst, with traffic and transactions on the platform continuing reaching high levels through the weekend.
To drive sales mid-week when demand comparatively lessens, platforms were pushing deals, especially towards the evening when consumers were likely to shop on weekdays.
“In the first two days, there was a 25% growth (compared to last year). However, the growth dropped by 20% on Thursday and Friday,” said Santhosh Balasundaram, chief executive and founder of Shadow Etail, an ecommerce seller on Amazon and Flipkart marketplaces. “Platforms were asking brands to list their products on deals during the weekdays since the user traffic was slowing down.”
Like every year, smartphones remained the single-largest category in terms of GMV with 42% share. Others contributing to the first-week sales include lifestyle (13%), appliances (12%), consumer electronics (10%), and homeware and furniture (10%), data showed.
Fashion and lifestyle brand Zouk saw a fourfold growth compared to BAU and is anticipating strong demand for its gifting range in the coming days. Meanwhile, ethnic wear startup Suta is expecting a 40% YoY growth in the festive sales. “In a country like India, with such a high density of shopping happening these days, we still have a large number of last minute shoppers till Sunday, September 28,” said Sujata Biswas, cofounder of Suta.
While most buyers shopped for appliances and electronics in the first week, analysts are expecting apparel, lifestyle, beauty and personal care, and gifting segments to pick up closer to Diwali.Quick commerce showering gig workers with festive incentives to make them stay Shoppers splurge as GST cuts light up Chennai's retail hub Ecommerce platforms are set for bumper sales Carts to fill up fast & how! Ecomm platforms are set for bumper sales Ecomm orders shoot up as annual sale events open Clash of the carts: Qcomm & ecomm in race to deliver this festive season Analysts expect festive online sales to grow 30% after GST relief GST 2.0: Ecomm sellers, brands face working capital strain Festive fireworks ahead for ecommerce firms with season sales to rise 27%
Source: EconomicTimes
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