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Amazon and Flipkart Sale Events Failed To Attract 66% Consumers: What Went Wrong? [STUDY]

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online shopping during lockdown

In May 2020, a London based analytics firm GlobalData announced that Indian e-commerce market fuelled by the positive push from COVID-19 lockdown will reach ₹7 trillion (US$98.4 billion) by 2023.

This particular report came from their insight into consumer behaviour wherein they observed people showed increased interest in shifting to online spending in order to avoid exposure to disease vectors such as cash and point of sale terminals.

In an interesting turn of events, the latest survey from LocalCircles which is a community social media platform showed that nearly 66% of respondents didn’t shop online during the recent mega sale events of e-commerce giants Flipkart and Amazon.

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The survey which received overwhelming 17,000 responses from over 211 districts in India depicts that 36% of their respondents simply browsed through the online listing of products but didn’t care to purchase anything, while 30% didn’t even visit the sites.

Source: LocalCircles

Of the remaining 34%, 7% of respondents shared that they spent over Rs. 10,000 while 20% reported spending between Rs. 1000 and 10,000. Another 7% of respondents said they spent up to Rs. 1,000.

So, the question that arrives here is – What exactly held back the majority from cashing big on e-commerce deals?

What Went Wrong?

While there can be numerous possibilities why the majority of people held back from online shopping during lockdown, one of the most prominent reasons that definitely stands out is the fact that there has been an overwhelming number of pay cuts and layoffs due to COVID-19 which has almost everyone running scared and saving up for a rainy day.

In just five months, India’s unemployment rate increased from a mere 7.5% in January to 24% in May. Therefore, while this information continues to serve as a disturbing reminder of how badly the coronavirus impacted our economy, is also the primary reason why people held back their purchase.

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Besides, it is important to recall how the lockdown seemed to almost be ‘never-ending’ because of the timeline being stretched after every two weeks. This ended up adding a considerable amount of confusion amid the general public regarding the purchase of non-essentials. 

Many started looking forward to the e-commerce giants Amazon and Flipkart resuming operations so that they could buy the COVID-essential ‘work-from-home’ items such as laptops, notebooks, smartphones and so on. However, the unlock down solved that problem as many retail stores began opening up their doors.

Were The Amazon and Flipkart Sales A Complete Slump?

The recent sale events of eCommerce giants were definitely not a complete slump. Myntra, the Flipkart-owned fashion portal’s first sale of the year – ‘End Of Reason Sale’ which was conducted between 19 and 23 June, witnessed around 3.5 million customers buying 10 million products.

The Amazon India team, during the Prime Day sale, reported a majority of their artisans and weavers witnessing a growth of 6.7 times. Women entrepreneurs observed 2.6 times growth over average day sales and startup brands under the Launchpad initiative of Amazon grew 2.1 times over their average daily sales.

It has also been reported that close to 1,000 local shops from more than 100 cities onboarded Amazon India during this Prime Day sale which doubled their average daily sales. Additionally, Amazon also recorded some 1 million Prime members who shopped from small businesses in the 14-day lead up to Prime Day.

The responses from the Local Circles survey takers indicated that the electronics category, which includes laptops, mobile phones, tablets, printers, related supplies, routers, led the sales which once again show the growing demand in ‘work-from-home’ gadgets. 

Thus, all in all, these e-commerce giants did end up minting quite a hefty revenue from these sale events even though many consumers, who would have made purchases online under normal circumstances gave cold shoulders. As the Covid-19 impact is far from over anything soon and companies are going to remain in hot water for longer than expected time, what strategies eCommerce giants employ to get consumers back to a shopping spree.

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