E-commerce companies celebrate growth of festive season sales
India’s e-commerce companies are expected to rake in record profits this holiday season. Yet those profits remain limited by the fact that about two out of every three Indians do not have access to the Internet.business Updated: Oct 12, 2016 19:04 IST
Amazon India and Flipkart may have concluded their festive season sales this year, but India’s festive season e-commerce market is only just getting started.
India’s e-commerce companies, which also include smaller players like Snapdeal, are expected to rake in Rs 25,000 crore this holiday season, up from 20,000 crore last year, according to the Associated Chambers of Commerce and Industry of India (ASSOCHAM).
Yet those profits remain limited by the fact that only about two out of every three Indians do not have access to the Internet. In the U.S., where nearly nine in ten people have Internet access, holiday e-commerce sales on “Cyber Monday” have already eclipsed those of brick-and-mortar stores on “Black Friday,” the start of that country’s holiday shopping season.
As more and more Indians connect to the web, online sales during the festive season are likely to become even more lucrative.
“Most of the e-tailers have already jumped on the bandwagon for running promotional offers… to cash in on festive season frenzy and have set off marketing campaigns to rake in maximum profits,” ASSOCHAM secretary general D.S. Rawat said.
Amazon India and Flipkart, the country’s two largest e-tailers, together sold more than 30 million units during the first week of October, according to spokespeople for the companies, and their websites netted more than a combined 100 million page visits during their festival sales.
“In our three years of presence in the country, we have witnessed very high traction during [the holiday season],” the Amazon India spokesperson said.
During this year’s five-day “Great India Festival Sale,” the U.S.-based company had five times more customers than it did during last year’s holiday sale, the spokesperson said. And Amazon India’s customers are not confined to the big cities: the company received orders from 90 percent of the country’s pin codes, a feat that would have been impossible were it not for the significant spread of Internet access.
Most of Amazon India’s sales increase, moreover, came from smaller cities and towns, the so-called Tier 2 and Tier 3 cities where the Internet was later to arrive. Flipkart also saw a larger share of its orders come from Tier 2 and 3 cities this year than last year; orders from such cities rose from 34 to 42 percent, a company spokesperson said.
“E-commerce is evolving, and the annual festive season sales are helping expand the market,” the Flipkart spokesperson said. “This is not only in Tier II and III cities, but metros where customers have not shopped online look out for festive season sale to try out online shopping.”
As online holiday sales have become more profitable, e-commerce companies have begun to offer more than just reduced prices, the Flipkart spokesperson said. “Consumer friendly initiatives such as a smooth returns policy, cash on delivery, card on delivery are only catalysing this growth.”