So who won the festive sale bonanza? Flipkart, Amazon or Snapdeal?

Pundits are yet to identify a clear winner.

 |  5-minute read |   07-10-2016
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This festival season is the most significant period for Indian e-commerce companies, particularly Flipkart, which had bet on the Big Billion Day sale (BBD) to revive growth and win back market share from Amazon.

Just one day of festive sales could generate around $300-400 million (about Rs 2,000-3,000 crore) in orders for the three e-commerce players, they said. Amazon had kicked off the sale on Saturday, followed by Flipkart and Snapdeal on Sunday.

What happened on Day One?

Flipkart: Flipkart and Myntra together sold 2.25 million units in the first 12 hours of BBD sale. They sold more Apple watches in 10 minutes than the total sale of Apple watches online and offline in a month. Myntra clocked three times more revenue in the first hour, compared to the 2015 edition of the sale.

Amazon: In the first 12 hours, it managed to sell over 1.5 million units. More than 1,00,000 units were sold in less than 30 minutes. Microwaves saw a 30-time spike in demand. Consumer durables' categories saw 10-times growth. Diapers and baby products witnessed an increase of 12 times.

Snapdeal: At midnight, 180 orders were booked per second. By 4 pm, more than 1.1 million people had made purchases. Orders went to nearly 52,000 sellers. People from 2,800 cities and towns placed their orders. (Source: the web)

Online market leader Flipkart outsold arch-rival Amazon India during the first sale event of the all-important festive season, recording unit sales of 15.5 million compared with 15 million units for US-based online retailing giant Amazon.

Flipkart Internet Pvt Ltd generated gross sales/gross merchandise value (GMV) of at least Rs 3,000 crore during the five-day BBD, which ended on Thursday.

ecom-embed_100716045011.jpg Last year, the three players together did business of $1 billion (Rs 6,800 crore) in the same period. 

Flipkart said it sold 15.5 million units during its five-day sale, striding past Amazon which said it clocked sales of 15 million units till Wednesday.

Smartphones and televisions helped boost the value of goods sold by Flipkart to $500 million. In contrast, Amazon sold large amounts of merchandise including daily consumables, detergents, spices and groceries, apart from smartphones and televisions.

Flipkart's total units sold include only physical goods and do not include virtual membership and low-cost items like candy, detergent bars, spices and eggs, the Flipkart spokesperson said.Amazon India, which sold 15 million products, has aggressively been trying to tap customers by selling its flagship prime membership and low-cost FMCG goods, a segment which Flipkart is yet to tap into.

Prime, the Amazon subscription-based loyalty programme, drove a third of all orders on its platform, its highest sales so far in India, during its five-day sale.

Amazon India said on Wednesday that its annual Prime subscription service, priced at Rs 499, emerged as the top selling item in the sale which helped it to leverage sales of groceries-like products.

Amazon in the US counts nearly half of all households as prime customers, who spend nearly double ($1,200) than regular users to buy goods on its platform.

The e-tailer shipped a little over 15 million items to customers across the country and got tens of thousands of users to pay Rs 499 for its Prime membership. Overall, more customers bought Amazon's Prime subscription than the best-selling smartphone on the platform.

While Amazon India's gross sales numbers are not known, analysts tracking the sector said the average order value will be lower given its focus on consumables during the five-day sale.

Last year, the three players together did business of $1 billion (Rs 6,800 crore) in the same period.

Gross sales are net of discounts but before product cancellations and returns, which tend to jump during sale events.

It's been a very important event for us, it puts us back in a very clear leadership position, said Binny Bansal, CEO of Flipkart. He declined to confirm the exact value of goods sold. Last year, the company had sold goods worth $300 million.

In recent months, the battle for leadership of India's online retail industry had intensified with industry estimates pointing to a gap of about 15-20 per cent between the gross sales of Flipkart (which also owns fashion portals Myntra and Jabong) and its closest rival Amazon.

Flipkart's performance signals a sort of comeback to its heyday when it was known for offering an unrivalled assortment of products and the biggest discounts. The performance will erase doubts about the company's ability to take on Amazon and marks a big win for chief executive Bansal.

This festive season, Flipkart did several things different from last year. It invited frequent buyers to an exclusive preview, showcased a larger range of exclusive deals on smartphones, revamped its mobile and desktop interface and used its large base of users of 100 million to get better discounts from sellers.

The facility to exchange products and low-cost loans also helped attract more buyers for higher-priced products. According to Flipkart, it saw a 100 per cent rise in orders on EMIs and 50 per cent on product exchange during the sale.

In terms of reach, Amazon said it was able to bring five times as many new customers on board during this year's sale when compared to last year.

Moreover, 70 per cent of all new customers came from tier-II cities and below, allowing the company to receive orders from 90 per cent of all registered postal pin codes.For Amazon, electronics, fashion and fast-moving consumer goods continued to be the biggest three categories during the sale. The company said it saw growth across all categories, a healthy sign for the e-commerce segment.

The online retail industry, including Amazon India and Snapdeal, would have clocked gross sales of maximum $1 billion without accounting for 15-20 per cent returns in their five-day sale.Pundits are yet to identify a clear winner. Almost all players have earned on an average $100 million (about Rs 700 crore) in sales, said insiders.

Amazon may have had a little more transactions and may be a notch higher than Flipkart.

Also read: What Flipkart and Amazon are doing to outsmart each other this Diwali

Writer

K Srinivasan K Srinivasan @krishsri59

The author is a GST reader and writes on macroeconomics and indirect tax laws.

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