It is a great time to be an ecommerce business in India, notwithstanding the bad press as the momentum for online shopping continues this year. The festive sales season which started this week and will include sale events around Independence Day and Diwali are expected to register a 40% growth over the previous year, driven by purchases from tier 3 and 4 cities.
Amazon India wrapped up its two-day Prime Day Sale event on Tuesday and Flipkart’s Big Savings Day sale ends on Thursday – marking the beginning of the online sale event season.
Much like the offline and online sales driven by brands, ecommerce marketplaces have also started to distribute their mega sales events through the year rather than just focus them around the Diwali or Dusshera festivals.
Both Flipkart and Amazon did not comment on the specifics of the sale events and other detailed queries sent by TechCircle.
“This year, we are expecting an increase of 30-40% volume over and above the last year’s sales. Given the fact that there was a growth trajectory in tier 3 and 4 cities that resulted in about 60-70% increase last year due to the pandemic,” said Siddharth Agarwal, vice president and chief strategy officer at logistics firm Ecom Express.
For logistics aggregator platform Shyplite, the ongoing sale has led to a 150% increase in volumes of packages, founder and managing partner Nisschal Jain said.
Direct-to-consumer (D2C) brands have seen a nearly 200% growth in categories such as beauty, nutrition and small electronics, said industry experts. Among the top-performing categories in terms of GMV (gross merchandise value), smartphones will continue to top the charts while the sale of apparels has also seen a comeback after a lull in 2020 due to the Covid-19 pandemic.
“D2C brands have their own events and promotions on their websites fortnightly or weekly where the discounts are higher. However, their share has grown on sale events on the online marketplaces. The growth in sales is nearly 200% from say two years back,” said Swati Bhargava, cofounder of coupon and cashback site CashKaro.
Co-founder of D2C latex mattress brand Morning Owl, Gaurav Raj, told TechCircle that on day one of the mega sales by the ecommerce platforms, he saw a 200% spike in business.
While the initial hesitancy around shopping online was addressed over the past year as users were compelled to shift to ecommerce for grocery and essentials, this has translated into an increase in online transactions for other categories as well. Bhargava said that the focus had moved from household items and essentials to apparel as people contemplate getting back to work.
The D2C brands too aren’t shying away from giving out attractive discounts.
“At the moment, we are going deeper with discounts, specifically during the festive season. We have seen compelling offers from brands all over at this stage, so we keep our discounts at par to ensure relevance – and to maintain the right visibility in market places,” Dhruv Bhasin and Dhruv Madhok, cofounders of beauty brand, ARATA said.
The discounts coupled with the customer’s expectations for next-day delivery or two-day delivery has the ecommerce industry players on their toes. “Except for a few pockets in South India, where Covid cases are still high and there are certain restrictions, the supply chain has largely opened up,” said Agarwal of Ecom Express adding that the company was investing heavily on largescale automation and infrastructure planning anticipating the surge in demand.
According to a report by IBEF, the business to consumer online retail sector is expected to reach $99 billion by 2024 growing at a CAGR of 27% from the period of 2019 to 2024. The key drivers will be grocery and fashion and apparel retail with an expected 220 million online shoppers by 2025.
With the buoyancy in discounts and growth of online first brands, the trend seems to be on point with a new class of brands and shoppers driving growth.