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E-comm festive sales set to top Rs 39,000 cr this month

A six-day festive season sale earlier by e-tailers garnered Rs 19,000 crore

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Despite challenging macro conditions, the recently concluded six-day festive sale event from the likes of Flipkart, Amazon, Paytm and Snapdeal has garnered record sales of Rs 19,000 crore in gross merchandise value (GMV), according to RedSeer Consulting.

Given the strong industry performance during this first sale event, the whole festive month up to October-end is expected to generate up to $6 billion or Rs 39,000 crore in GMV sales.

The biggest theme of the festive season was 'value shopping' as indicated by a large chunk of customers from Tier II plus cities who shopped online owing to wide selection supported by affordability initiatives. As per the consulting firm, consumers have saved for and delayed their mobile purchase to the festive season, again indicating the strong value shopping proposition of festive days.

The consulting firm said that online sales by e-marketplace operators increased by 30% year on year (yoy) in 2019. Customers from Tier II plus cities, it said, contributed significantly towards the on year growth of 30% this year.

Anil Kumar, founder, and chief executive officer, RedSeer Consulting, said the first wave of the festive sale event has seen record GMV of almost $3 billion despite challenging macro environment, indicating that consumer sentiment on online shopping remains bullish.

"The larger push has come from Bharat customers migrating to online shopping driven by the strong value provided from the online retailers across categories including mobiles, which have shown a strong surge during the sale event despite having a relatively slow growth in the first half of fiscal 2019," said Kumar.

Like the previous year, mobile phone is the category leader contributing to over 55% of GMV during the festive days.

Festive sales, according to RedSeer, are largely becoming a two-player market with Walmart-backed Flipkart and Amazon dominating over 90% of the market share during the sales event. While Flipkart continued to lead the festive sales in GMV terms, with 60-62% standalone gross GMV share and around 63% share after including other group entities viz. Myntra and Jabong.

Strong performance across categories including mobiles was the key reason for Flipkart leadership. This was in turn enabled by strong value prices, high equated monthly installment (EMI) adoption and diverse selection across categories, all marketed aggressively to reach customers widely. Amazon's GMV growth was 22% yoy, however, its volume growth rate was more than 30% on-year, said RedSeer.

While market leaders saw their cash registers ringing during the recent festive sales, others like Sanpdeal also witnessed strong participation by online shoppers on its e-marketplace platform. Kunal Bahl, chief executive officer and co-founder, Snapdeal, said, orders received in this sale event were 52% higher than in the comparable sale period last year. "Snapdeal's continued growth and leadership in Bharat e-commerce is proof that value-priced selection is an evergreen attraction for shoppers across India. Among top-selling categories were apparel, fashion accessories, personal care appliances, lamps and lighting and general merchandise for home and kitchen," said Bahl.

Consumer buying sentiments captured by CashKaro.com also showed a significant increase in the number of transactions this festive season. The country's largest cashback and coupons site with over 3.5 million registered users witnessed a 1,500% increase in transactions this time around. Mobile phones emerged as the highest-selling category, followed by laptops and large electronic appliances that saw a 1,000% increase in sales. Fashion and clothing as a category saw a 900% rise while wellness and beauty witnessed around a 600% increase in transactions.

Swati Bhargava, co-founder, CashKaro, said, "Sales this year have exceeded our expectations. This has been our strongest ever sale season with a whopping 1500% rise in transactions as compared to normal days and an equally impressive increase in GMV driven to our partner sites. We were also able to reach out to many new users during the sale period this year with as many as 50% first-time shoppers on the website and mobile application."

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