The first week of online festive sales that concluded last week witnessed 55% year-on-year sales growth.
Ecommerce majors such as Amazon, Flipkart and Snapdeal among others have seen sales worth $4.1 billion (Rs 29,000 crore) compared to $2.7 billion (Rs 19,000 crore) worth sales last year, according to data compiled by RedSeer, a consulting firm that tracks the ecommerce sector.
RedSeer had projected sales worth $4 billion during the first week (October 15 to 21) of the month-long festive sales season.
The biggest growth lever this year was the spike in the number of shoppers online - the total shoppers during the first week jumped from 28 million last year to 52 million this year (85% y-o-y). With more than 55% of these shoppers coming from Tier-2 cities like Asansol, Ludhiana, Dhanbad, Rajkot among others.
Affordability, wider access to mobile phones, the growth wave in tier II cities and the availability of stock items were the major reasons for the boost in sales this year. These factors resulted in recovery of sales for brands and sellers that have been strongly enabled by online channels after the Covid-19 pandemic made it difficult for them to survive offline.
“The e-commerce sector exceeded the aggressive forecasts we had made a few weeks before the festive season week 1 started out. This points to a revival of consumption sentiment amongst Indian shoppers, where they have been shopping online in big numbers driven by massive selection, great prices and the convenience and safety of shopping from home. In many aspects this is indeed a #festivaloffirsts for Indian eCommerce which will build a strong foundation for its future growth,” said Mrigank Gutgutia, Director at RedSeer Consulting.
According to RedSeer’s report, smartphonescontributed to 47% of total festive sales, driven by new launches and affordable models. Smartphones worth Rs 1.5 crore were sold across online platforms in the first week of 2020 festive sales, enabled by value selection, affordability schemes and fast delivery.
Given the Tier II+ skew of the shoppers, buyers preferred affordable price ranges this year for almost all product categories, instead of expensive items. With a high share of Tier II+ shoppers coming in this time, Flipkart group emerged the overall leader during festive sales in the first week, accounting for 68% of the total sales by Flipkart and Amazon combined. These two players together contributed to 90% of the total online sales during this period.