E-commerce firms Amazon, Flipkart may clock $9 bn in gross festive sales

E-commerce firms Amazon, Flipkart, and others are expected to witness blockbuster festive season sales this year. The pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency than last year, according to analysts.

This year’s (2021) festive sales (Gross GMV or gross merchandise value) is expected to grow 30 per cent year-over-year to $4.8 billion during the first week of the festive season and potentially clock over $9 billion GMV during the whole festive month, according to consulting firm RedSeer’s e-commerce festive season report. This is a 23 per cent increase from last year wherein the e-commerce players clocked a GMV of $7.4 billion.

The overall online GMV is expected to touch $49-52 billion, up by around 37 per cent from last year, primarily driven by strong consumer funnel expansion and high adoption of online shopping post-Covid across categories.

“We believe that the 2021 online festive sales will continue to ride on strong tailwinds of greater consumer digital adoption supported by an increasingly positive macro and consumption sentiment post the Covid second wave has passed,” said Mrigank Gutgutia, associate partner at RedSeer.

The growth will be mostly driven by the accelerated online adoption which has been witnessed as an effect of Covid. Secondly, Tier-2-plus cities and towns will continue to drive growth as they are 55-60 per cent of the total shopper base this year, similar or higher than 57 per cent in 2020 festive days.

On the other hand, as offline retail and mobility, is recovering almost up to pre-Covid levels, this will impact the online festive sale as customers may opt for offline shopping as well.

RedSeer sees strong bullishness in sellers towards online festive sales. About 80 per cent of them believe that the festive sales will enable them to drive strong sales growth and make up for the losses during the Covid period.

“Driven by above, we expect strong 30 per cent year-over-year growth in festive sale week in 2021 to reach $4.8 billion in Gross GMV with growth across categories, and setting the stage for a strong year for e-commerce in 2021,” said Gutgutia.

Further, categories have been evolving differently during these months which will see an impact during the festive sale as well. While mobile will continue to dominate driven by new launches, electronics are expected to see the second-highest demand driven by the wide range of selection, easy payment options including EMIs (equated monthly instalment) and Buy Now Pay Later among other factors. Additionally, fashion is also expected to see a steady recovery this festive season with greater outdoor mobility of consumers and steady rebound of fashion and office wear.

The RedSeer report finds that the sellers are very bullish on this year’s sales and are looking to recover the losses suffered due to Covid. Nearly 80 per cent of the sellers agree that festive sales will play a key role in recovery from Covid losses. About 70 per cent agreed that the bigger online players have been supportive and positive which led up to the sales event.

E-commerce firms such as Amazon and Flipkart are strengthening their supply chain networks with the addition of new facilities ahead of the upcoming festive season. They are also scaling up their hiring initiatives to meet consumer demand.

Flipkart will kick off the country’s festive season with the 8th edition of its biggest flagship event, The Big Billion Days (TBBD), from October 7-12. The six-day event will see millions of consumers, sellers, small businesses, artisans, Kiranas, brands and e-commerce ecosystem partners come together for the upcoming festive season.

Flipkart is wooing ‘kiranas’ for upcoming festive season sales. Today one-third of all shipments of Flipkart Group is managed by kiranas at the last mile. According to the sources, the company is expecting 90 million shipments and they would have 100 per cent green packaging. More than 200,000 truckers would be part of the ecosystem.

Over 100,000 kiranas have been onboarded to reach consumers across thousands of cities. Also, over 1.5 million kiranas and retailers will be able to avail credit in just two minutes through Flipkart Wholesale’s partnership. Kiranas can avail credit line will range from Rs 5,000 to Rs 3 lakh with an interest-free period of up to 14 days. Over 1.5 million kiranas and retailers will have access to a wide range of products through Flipkart Wholesale. Flipkart Wholesale will also be part of this BBD for the first time as an integrated one group.

Amazon has also announced this year’s ‘Great Indian Festival’ sale. According to the microsite published by Amazon, the event will go live around the festive season in India this year. The event would allow hundreds of thousands of small and medium businesses (SMBs) to offer a unique selection to customers. Amazon India plans to expand its fulfilment network in India, with a nearly 40 per cent increase in its storage capacity over the last year. With this expansion, Amazon.in will have more than 43 million cubic feet of storage capacity, across 15 States, supporting around 850,000 sellers across India.