Backed By First-Time Shoppers, Flipkart And Amazon Dominated Festive Online Sales in India

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It seems like Flipkart and Amazon squeezed the most out of the month-long festive season in India as they have minted close to $7.3 billion in combined sales!

E-commerce received a massive influx of new online shoppers as offline retail is still struggling from the pandemic induced slowdown. Thus, Walmart-backed Flipkart Group and Amazon were able to take home bigger GMVs aka gross merchandise value in the holiday season.

According to a report released by RedSeer Consulting on Thursday, the two e-commerce majors in India together dominated 88% of the overall online industry sales of $8.3 billion starting from mid-October to mid-November.

Within their combined humongous share of the total online sales, a 58% was attributed to the Flipkart Group (including Myntra), while its rival Amazon India accounted for 30% share in the festival sales.

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Flipkart was able to cover more ground than Amazon is because they have always had a very strong foothold in Tier 2 cities of India whereas Amazon has always been focusing mainly on the metros.

Pandemic Effect: Influx Of First Time Online Shoppers

The report also highlighted that online retailers in India attracted numerous first time online purchasers from remote or rural parts of India. All thanks to the pandemic leading to a sharp decline in footfalls in physical stores.

Commenting about the same, the online marketplace Snapdeal reported that four out of every ten orders that were placed on their platform during the festive sale came from first-time users, while more than 90% of their total orders during the festive season seemed to be originating from non-metro cities.

According to the data collected by the market tracker firm, even though the gross merchandise value per customer dropped by 10% to Rs. 6,600 when compared to the same period in 2019, the loss was offset by whopping 40 million new users happened to shop online this year. 

Mrigank Gutgutia who helms the position of a Director at RedSeer, in a statement about the same, said that the even though COVID-19, being a major driving force, increased the number of new customers shopping online, it also led to driving down the per-person value as most shoppers were looking for affordable and value-conscious pricing options.

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Lastly, while it is true that this festive season was a big sign of revival for Indian online retailers, they, however, are sceptical if the same traction will remain in the next quarter without the festivities and discontinued discounts and offers. 

To throw light on the same, an executive from a consumer electronic brand said that the drop in online sales could very well be significant and one can expect to observe at least 40% or more loss in traction in the discretionary categories. 

He further added that, nonetheless, the situation will remain much better than offline as it is moving at a snail’s pace due to the lockdown after-effects.

When reached out for a comment on this report, Flipkart denied commenting whereas an Amazon representative said that they cannot confirm nor deny the findings of a speculative report. We will keep you updated on all future developments. Until then, stay tuned.

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