Flipkart and Amazon clock Rs 31,000 crore in festive sales Read more at: //economictimes.indiatimes.com/articleshow/72101606.cms?utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

The Economic Times
By  Aditi Shrivastava, Nov- 18, 2019

BENGALURU: India’s top two web retailers Flipkart and Amazon clocked combined sales of Rs 31,000 crore ($4.3 billion) during the crucial 15-day festival period in October, according to a report by Red-Seer Consulting that ET has exclusively accessed. The number fell short of analyst expectations of $5 billion in sales. The average order value for Flipkart stood at Rs 1,976 versus Rs 1,461 on Amazon, indicating that customers bought highervalue items from the Walmart-owned marketplace. Flipkart led with 64% share of the combined gross sales while Amazon continued to fare higher in net promoter score (NPS). NPS measures the loyalty of customers to a company. ET has reviewed the findings. RedSeer declined to comment on the report citing confidentiality. Gross sales, or gross merchandise value (GMV) in industry parlance, missed analyst estimates by 14%. The two ecommerce marketplaces had been aiming for $5 billion in sales collectively during the festival period, according to estimates made by analysts and internal targets set by these companies, ET reported on September 4. As for the gap between Flipkart and Amazon, it grew narrower in terms of gross units shipped. Flipkart’s share in terms of units stood at 56% while Amazon’s share was 44%, the report highlighted.

Better availability and variety of electronics and fashion items improved NPS for Amazon, while Flipkart led on the back of strong performance in smaller cities, RedSeer’s client report indicated. Customer cancellations were also lower on Amazon, but Flipkart’s reach and brand recall in smaller towns and cities was better, said the report. Interestingly, both companies are neck and neck in the metros, with Amazon leading by a percentage point. “We are humbled that Amazon.in is... also becoming an important driver for the new digital economy in the country,” Amit Agarwal, country head, Amazon India, said in an official blog post. Flipkart said expectations had been more than met. “This festive period we exceeded all customer metrics we measure ourselves against,” a Flipkart spokesperson said in a statement. The festive sale period helps retailers shore up sales as this is when consumers plan large value purchases and are also traditionally more open to spending on new items. This year, the wider retail ecosystem was also closely watching the performance of etailers, given that this has been the first large event for these retailers after the revised ecommerce policy kicked in on February 1 barring online marketplaces and their group companies from predatory pricing in any form. While both companies had denied any impact of the economic slowdown on their sale numbers, the report indicated that the overall internet market grew at a slower rate. “Yearon-year growth for festive season came down due to a tough macroeconomic environment and decreased overall consumer spending,” the report said. Online retail is wooing consumers outside the big cities. “It is clear that ecommerce companies are getting growth from locations where traditional retail presence doesn’t even exist,” said an investor in the ecommerce space. “The good news is that the market is growing but at the same time, how much deeper can you go and take additional wallet share from the metro cities, which hold the bulk of the high-value consumers, and therefore higher margins remains a concern.” Units sold increased 60% over last year to 110 million in the first leg of the sale, while the average selling price decreased by 23% to Rs 1,680. “Unit sales were higher than gross sales due to slow growth in new smartphone users, wider selection in fashion and long-tail categories,” the report indicated. 

While the number of transactions per user was higher on Amazon for the current year, Flipkart’s leadership was boosted by an uptick in smaller towns and cities (tier 2 cities and beyond) where it was four times bigger than its rival in terms of GMV or gross sales.

While the number of transactions per user was higher on Amazon for the current year, Flipkart’s leadership was boosted by an uptick in smaller towns and cities (tier 2 cities and beyond) where it was four times bigger than its rival in terms of GMV or gross sales. 
Separately, Snapdeal’s GMV grew to Rs 164 crore in its Sale 1 on the back of fashion and long-tail categories, with almost 85% shoppers from tier 2 areas. GMV is overall sales clocked by an online marketplace and does not include discounts, returns, cancellations and cashback on products sold. It is distinct from revenue.  


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