E-commerce festive sales grow over 50% from 2016: Analysts

Online retailers like Flipkart and Amazon are estimated to have grown their sales by over 50% compared to last year as the five-day festive event came to an end on Sunday, analysts tracking the market said.

Overall gross sales is expected to hit up to $1.7 billion, according to analysts compared to the $900 million the industry racked up last year during the corresponding period.

The data is indicative and not shared officially by any of the companies. The festive season leading up to Diwali is significant for e-tailers as it helps them mop up a good chunk of their annual sales and also brings in a new set of consumers, who typically don’t shop online.

Flipkart CEO Kalyan Krishnamurthy claimed the e-tailer grabbed 70% share of online sales this week widening its lead over Amazon this year, although he did not detail its shipment numbers or gross sales during the past five days. Amazon termed this year’s sale as its biggest saying rivals had used “poorly informed speculative data” for establishing their leadership.

Initial data from logistics companies and analysts suggested that Flipkart is likely to have clocked around $700-800 million in gross sales, while Amazon managed $500-600 million of sales this week. According to top executives at Amazon and Flipkart, smartphones and large appliances were the big drivers of sales as expected. The sale of Prime subscriptions grew four times compared to single-largest day sale of Prime for Amazon. The company has been pushing its Prime programme at Rs 499 per annum as members purchase more than non-Prime users. Paytm Mall, which saw its first festive season sale, witnessed spike in categories like smartphones, electronics and fashion.

“Our success during this sale was not due to just deep discounting but the unique selection we added in the run up to the sale. Our affordability programmes played a big role this sale and I can say we have surpassed what we had aspired for during the sale which was about having 70% share of the market. We have doubled our gross sales,’’ said Krishnamurthy. During the sale, data released by research firm Red Seer said that awareness for ‘Big Billion Days’ sale was higher than that for Amazon’s ‘Great Indian Festival’.

“Smartphones and large appliances were the highlight of the sale as they drove large parts of the sale. All the major brands had their new ranges getting launched on Amazon during sale and the kind of response we have seen for iPhone deals has been phenomenal,” Manish Tiwary, VP, Amazon India, said while talking about the leadership claims of Flipkart in the smartphone category. Smartphones have been traditionally the topselling product during such sale events.

Both Flipkart and Amazon managed to add news users during the past week. Tiwary said 85% of their new users came from tier II and tier III towns, while Krishnamurthy said the sale contribution of non-metro cities went up by 5%. “We have seen 50% of our categories doubling their sales and fashion, grocery saw purchases from new users on the platform,” Tiwary said.