Festive Sales: A Litmus Test For Indian eCommerce Industry

With the onset of festive season India’s biggest online marketplaces Amazon.in, Flipkart, Snapdeal and Shopclues will be going head to head with their flagship sales events. The next couple of weeks will witness a whirl of feverish activity wherein customers will be flooded with discounts & offers on brands across categories like Mobiles, Electronics, Fashion, Home & Kitchen, etc. Other major sites like Jabong, Myntra, Paytm, eBay are also set to kick off their festive season sale.

While the primary battle will undoubtedly be between Amazon Great Indian Festival Sale & Flipkart’s The Big Billion Days, let’s take a closer look at what to expect in terms of trends this festive season.

Comparing to previous years..

In 2015 during festive sales period, all the three major players of Indian e-commerce (Amazon.in, Flipkart & Snapdeal) together registered sales of approximately $500-600 million, of which Flipkart alone sold products worth $300 million during its Big Billion Days, as reported by Economic Times.

Last year, online retailers did business worth nearly Rs 9,000 crores as shoppers splurged on gadgets, apparel, home furnishings and more. However, this year with the new DIPP policy in place, retailers may not be able to offer huge discounts and customers will, therefore, value other savings mechanisms more. Hence, affiliate sites such as CashKaro.com becomes an indispensable channel in helping users save & earn ‘Extra’ on their online shopping during festive sales. Also last year the online sales were riddled with problems, with discounted items getting ‘out of stock’; websites crashing as they were unable to handle the customer rush and orders getting cancelled days later. To avoid the fiasco this year, eCommerce giants have already hired more staff, powered their server capacity since at the end such incidents can create a lot of negative publicity, which is not good for the e-tailer.

What to expect out of 2016 festive sales?

With a string of festivals over the next three months—starting from October first week—Indian retailers are expected to register about 40% of their annual sales during this period. CashKaro.com too is expecting a 300% increase in GMV from Oct-Dec, driven by major unicorns like Amazon.in, Flipkart, Snapdeal, Shopclues and Paytm.

Going by the numbers from last few months, it is expected that consumables, fashion, mobiles & electronics will emerge as top selling categories in addition to health & beauty. While daily consumables are shaping up to be one of the largest categories, fashion and consumer electronics shall perform neck-to-neck regarding volumes. While the average selling price of products in this category is less, it is anticipated that the category will help India eCommerce players boost repeat purchase among regular online shoppers, through faster delivery and better customer experience.

This festive season, rural India is expected to come to the fore. An increase of 50% in traffic from Tier 2-4 cities will be witnessed as discounts & increased cashback offers will encourage people to come online and shop more. Growing internet, smartphone penetration and rising income levels are helping the small cities in India to rise on the e-commerce roadmap. Participation from places like Pune, Jaipur, Aurangabad, Guwahati, Indore, Nagpur, Coimbatore, etc. will see a considerable rise.

Also, unlike last year, we expect equal promotion on both Desktop & App platforms as retailers recognise the importance of both the mediums. While mobile phones help in easy transactions and apps are more user-friendly for shopping online, a majority of all eCommerce conversions are still carried on a desktop, according to the data taken from Custora Ecommerce Pulse report for 2016. Considering players like Flipkart-owned Myntra who has switched back to desktop from the app-only platform, it is a re-assurance that while mobile commerce is growing at an exponential rate, online retailers must provide flexibility to customers considering that there is better visibility of products on the desktop in addition to the feasibility of product comparison.

Further, to acquire a wider mindshare during flagship events of rivals, eCommerce players like Amazon.in, Shopclues, etc. more going aggressive in booking premium inventories on CashKaro.com during the entire festive period. To top it off CashKaro will also be offering Cashback as Rewards on all Amazon transactions done via them.

In order to grab a larger market, eCommerce players are also extending increased affiliate commissions on categories like consumables, fashion and beauty as affiliate sites like CashKaro constitute about 20% of their business.

With online sales growth remaining sluggish during the first half of this year, all online players are expecting the market to revive to normalcy in the coming few weeks. Moreover, if Amazon.in, Flipkart and Snapdeal can pull off successful festive sales, this time; they could be setting the phase for an e-commerce market to multiply nearly three times its size next year.

While it’s a little difficult to put bets on who might emerge victorious after these festive sales, shoppers can gear up for exciting times ahead since e-commerce players are not going to leave any stone unturned to lure them.