E-commerce players gear up for record festive sales as India reopens

Amid the pandemic last year, Indian shoppers helped e-commerce platforms clock $7.4 billion (about Rs 52,000 crore) in total gross merchandise value (GMV) during the festive months (October-December).

This year, as retail shops reopen and Covid cases slow down, Indians are expected to buy goods worth a whopping $9 billion (Rs 64,000 crore) across online platforms.

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Strong online festive sales are expected despite offline opening up to nearly pre-Covid levels and in the first festive week alone -- that starts from October 3 with Flipkart's 'Big Billions Day' (BBD), Amazon's Great Indian Festival and Reliance Group's online fashion e-retailer Ajio as main players -- e-commerce players are expected to clock sales worth $4.8 billion (Rs 33,600 crore) which is a 30 per cent increase from last year, according to latest data from Bengaluru-based market research firm RedSeer.

In 2020, e-commerce platforms clocked almost $3.7 billion (about Rs 25,900 crore) in GMV in the first week of festive sales.

Ahead of the festive season, Amazon India has significantly expanded its operations network. It has increased storage capacity by 40 per cent with more than 60 fulfilment centres in 15 states, offering 43 million cubic feet to its sellers.

It now has more than 1,850 delivery stations, both owned and operated by Amazon as well as delivery service partners, to further its direct reach, including in remote towns.

"Our continued investments in infrastructure across our fulfilment and delivery network will enable us to support our customers even better, with the convenience they need and deliver safely with a seamless, fast and reliable experience during the festive season," said Akhil Saxena, VP, Customer Fulfilment Operations, APAC, MENA and LATAM, Amazon.

Walmart-owned Flipkart said it is connecting more than 5,000 offline branded retail stores from more than 300 cities on its platform. This includes small and large format brand stores offering products from fashion, large appliances, mobiles and consumer electronics.

"We are proud to facilitate pan-India consumer market access for over 5,000 branded retail stores. We look forward to scaling this programme over the next few months and making products from branded retail partners that may be available to a much larger audience across India," said Rajneesh Kumar, Chief Corporate Affairs Officer, Flipkart Group.

Reliance Group's online fashion e-retailer Ajio is also geared up for its 'Big Bold Sale' till October 4. The company provides a catalogue comprising over 6 lakh styles from more than 2,500 brands.

According to RedSeer, the growth this year will be mostly driven by the accelerated online adoption, which has been witnessed as an effect of Covid.

"Tier 2+ cities will continue to drive growth as they are 55-60 per cent of the total shopper base this year, similar or higher than 57 per cent in 2020 festive days. On the other hand, as offline retail and mobility is recovering almost upto Pre-Covid levels, this will impact the online festive sales as customers may opt for offline shopping as well," the report noted.

While mobiles will continue to dominate driven by new launches, electronics are expected to see the second highest demand driven by the wide range of selection, easy payment options including EMIs and Buy Now Pay Later (BNPL), among other factors.

Additionally, fashion is also expected to see a steady recovery this festive season with greater outdoor mobility of consumers and steady rebound of fashion and office wear.

"We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the Covid second wave has passed," said Mrigank Gutgutia, associate partner at RedSeer.

Nearly 80 per cent of the sellers agree that festive sales will play a key role in recovery from Covid losses, while 70 per cent agreed that the bigger online players have been supportive and positive which led up to the sales event.

The overall online GMV this year is expected to touch $49-52 billion which is around 37 per cent growth from last year, primarily driven by strong consumer funnel expansion and the high adoption of online shopping post-Covid across the categories.