ecommerce sales: $6.5 billion sales in a week party begins on ecommerce street

Online marketplaces sold goods worth $6.5 billion, or almost `55,000 crore, in one week of festive sales, marking a
26% increase from last year, with mobile phones, electronics, consumer durables, home and general merchandise accounting for three-fourths of the total sales.

Sales in the week starting September 26 made up for about 55% of the total ecommerce sales expected in the festive period this year, ecommerce consultancy Datum Intelligence said.On September 19, ET had reported that ecommerce players and brands selling online are expected to clock $12 billion in gross merchandise value (GMV) this festive season, 23% higher than around $9.7 billion last year. In ecommerce parlance, GMV is the overall sales clocked on an online marketplace.

Industry insiders said online shoppers–including a large chunk from smaller towns and cities–have been buying products with higher average selling price (ASP) with many opting for EMI payments. Some brands said they are worried about supply issues because the demand is higher than what they expected.

Ecommerce majors Walmart-owned Flipkart and Amazon India started their annual festive season sales–Big Billion
Days and Great Indian Festival, respectively–on September 27 with early access for subscribers of their loyalty programmes Amazon Prime and Flipkart Plus from September 26.

SoftBank-backed Meesho, which started its Meesho Mega Blockbuster Sale on the same day, saw a 40% year-over-year increase in orders. This surge was driven by strong demand from tier-II cities, with nearly 45% of shoppers coming from tierIV and beyond.

“Our first week was much better than the plan, which means the demand was front-loaded, indicating that many people planned their purchases because they wanted to make sure everything arrived well in advance for the festivals,” Meesho cofounder and chief executive Vidit Aatrey told ET. “I think it’s just a very healthy set of demands across the country,” he added.

Flipkart said the company was focusing on faster deliveries across all pin codes while expanding same-day and next-day
deliveries. “While major metro cities such as New Delhi, Kolkata, Hyderabad, Bengaluru continue to lead, we are also
witnessing strong demand from customers across tier-II+ regions such as Medinipur, Hisar, Berhampore, Bankura
and Agartala to name a few,” a company executives said about its flagship The Big Billion Days programme.

Over the past few years, a trend has emerged where festive sales begin earlier, ahead of Navratri–despite concerns
that consumers might hold off buying during ‘Shradh’–a 16-day period (from September 17 to October 2 this year) when many Hindus honour their ancestors and refrain from making purchases.

Brands and marketplaces have indicated being consistently surprised by the strong demand during this time.

Around Rs 50,000-55,000 crore ($6-6.5 billion) worth of goods were sold in the first week of ecommerce festive sale, Satish Meena, adviser at Datum Intelligence, said.

“The start was very fast… However, in the last day or so, we saw things slowing down,” he said. “It’s typically like this, almost 55-60% spending happens in the first period (and) then the focus moves towards the lower average selling price
(ASP) category.”

“There will be one more wave between Dussehra and Diwali,” Meena added.

Micro trends

Gurgaon-based wearables brand Noise, which sells audio devices and smartwatches, pointed out a “noticeable shift” towards products with higher ASPs.

“A common trend that we are observing across categories is customers looking at actively upgrading their experiences with a noticeable shift towards higher ASP products,” Gaurav Khatri, cofounder at Noise, told ET.

Ranjit Babu, director, consumer electronics, at Amazon India, said the e-tailer has witnessed strong customer demand across the consumer electronics category this festive season, with the premium segment (priced higher than Rs 30,000) seeing the highest year-on-year growth of 30%.