Taking the Ecommerce Fight: Great Indian Sale Vs. Big 10 Sale

Amazon Great Indian Sale: Amazon claims that ‘The Amazon Great Indian Sale’, which concluded today, has surpassed the sales of all previous ones organised by the online retail behemoth.

#DigitalErra Thought Corner

Manish Tiwary, Vice president of Category Management, Amazon India said, “We are amazed & humbled at the response to the Great Indian Sale, the sale surpassed all our expectations in important areas like prime member subscriptions, new customer acquisition and has set a new sales benchmark”

Tiwary added, “The Amazon Great Indian Sale May 2017 resulted in most of our important brand partners witnessing large sales spikes ranging from 8 to 90 times, led by fashion, consumer electronics, wireless and large appliances.”

The first day of the sale was the largest in terms of sales so far in 2017. Amazon says high growth momentum on customer acquisition from 2016 has continued into 2017, driven by tier 2, tier 3 and below geographies, which saw a 235% growth during the sale.

Prime Powering the Sale

Amazon prime membership continued to be the selling product during the sale. Prime members accounted for 35% of purchases made during the sale.

“We saw Prime customers shopping very heavily in the sale, contributing anywhere from 35–37 per cent of the orders coming in. Also, sales tend to drive up this programme and during the first three days of the sale we acquired five times as many customers for Prime than on a normal day,” said Tiwari.

It is estimated that about six million individuals have already signed up for the programme in India.

Ecommerce Majors Banking on Fashion and Smartphone Sales

Amazon’s move to bring fashion brands, such as GAP, Marks and Spencer’s and Under Armour exclusively on its platform, paid off with a nine-time growth in sales over the period of the sale.

Besides, Prime members also took advantage of exclusive deals. Redmi 4A smartphone that was pitched to prime members was sold out in under 45 seconds. Another deal on Apple MacBook Air also finished in a few minutes.

Its biggest rival Flipkart is expecting a five-time growth in gross merchandise value of products sold on its platform during its Big 10 sale that started on May 14 and goes on till May 18.

According to Counterpoint Research, Flipkart led the online smartphone sale market in 2016, and as per preliminary data, it has sequentially widened its lead over Amazon — 59% compared with 29% — in the first quarter ended March 2017.

Smartphones were among the first electronic devices to be sold online through the portals.

“The success of the online players depends to a large extent on the success of smartphones in 2017,” said Pavel Naiya, senior analyst at Hong Kong-based Counterpoint Research. “This is an attempt for Amazon and Flipkart to deal with the seasonal slow movement in the online market, and right now, smartphone is one of the key segments for online sales.”

Smartphones contributed close to 25% of the overall GMV (gross merchandise value) of the e-commerce sales through 2016, and is expected to remain at similar levels in 2017 that highlights the criticality of the segment to the e-commerce majors.

Flipkart’s senior director of smartphones, Ayyapan Rajagopal quoted, “All affordability programmes put together will be able to give us 40–50% uplift (in market share) in the next six months, and this will rub off on the revenue.”

In the fashion category, Flipkart has played a unique move by offering 99 per cent of its fashion items on sale. In fact, 60 percent of their customer base shops in fashion. This is one category — unlike electronics and mobile phones — which can be built on exclusivity as the margins are the highest.It is also offering a product line specially curated for the sale in association with leading brands. Wrangler, Woodland, Fossil, and Ferrari are among the brands that will constitute of 40 percent of all products offered during the Big 10 sale.

Rishi Vasudev, VP of fashion, Flipkart, says, “Sellers are providing the discounts directly. This brings higher footfall to our website, which benefits brands and sellers.” It aims to grab 40 per cent of the fashion segment in the market.

Flipkart has also expanded its back-end operations for logistics and last-mile delivery to ensure smooth operations. Moreover, they have added mom and pop stores as partners to ensure smooth last mile delivery.

Amid their tussle for a larger share of India’s online marketplace,one could see the two etailer’s fortunes may ride on smartphones and fashion sale.