October-November-December is the peak season for shopping in India – be it brick-and-mortar stores or online retail. Months of July, August and September sets the stage for this festive season as the revenues are clear indicators of the trend concerning the oncoming season.
Going by this yardstick, it seems Amazon is clearly ahead of Flipkart in terms of revenues, thereby setting stage for an explosive festive season.
But, why are online vendors not excited?
Flipkart Lags Behind Amazon
As per available data, Amazon sold more goods on their platform, compared to Flipkart, for 2nd straight month.
For the month of August, Flipkart churned out revenues of Rs 2100 crore, which is lower than Amazon’s revenue for the same period. In July as well, Flipkart sold less products compared to Amazon.
This development is certainly not sudden and unprecedented. Last year, Amazon India was India’s most visited ecommerce portal with 200 million visitors a month; and this year, Amazon again overtook Flipkart when they become India’s buzziest brand.
On the other hand, Flipkart is fighting hard to sustain their respectable position as it is encountering one obstacle after another. Recently, sellers on Flipkart’s platform revolted against their company policies, and they deliberately showcased 1 million SKUs as out of stock.
Having said that, the recent victory for Amazon India resulted from their aggressive ‘Great India Sale’ last month, which generated an increase of 300% sales, compared to normal daily numbers.
This momentum may enable Amazon to garner more traffic and more attention during the oncoming festive season, thereby pushing Flipkart further down in the race.
Note here, that the revenues mentioned here solely points to Flipkart’s standalone capability. If we add Myntra and Jabong’s revenue, then Amazon is clearly defeated.
Flipkart Gears Up For Festive Season
Meanwhile, not buckling down, Flipkart has decided to take on the might of Amazon with full force. As per available reports, Flipkart will aggressively promote their annual ‘Big Billion Day’ sales in the month of October (most probably October 1st week), and have reportedly planned to hire 10,000 temporary staffs to smoothly deliver products during this period.
Flipkart chief administrative officer Nitin Seth said, “In addition to having the new capability of alternate delivery model, we are looking at hiring more than 10,000 temporary staff in logistics and last mile across the country,”
Aided with their newest offering; PhonePe, Flipkart is planning several exclusive launches, including those in smartphone niche, which is the biggest online puller for all ecommerce portals.
On the other hand, Amazon is planning to offer 80 million products this festive season, via 1.2 lakh sellers pan-India.
In a reply, Amazon said, “We anticipate an extraordinary festive season for our customers & sellers — much bigger, better and delightful than ever before. We are also working towards expanding our last-mile delivery footprint, even in remote areas of the country, with initiative such as service partner programme and the ‘I Have Space’ programme, to empower sellers to serve customers nationally at lower costs.”
But Why Vendors Are Not Excited?
Amidst the excitement for the oncoming festive season, there is a section of online vendors, who are clearly not excited regarding the predictions for sales.
Infact, as per them, online sales would be lower, compared to last year.
As we observed, unlike previous years, vendors are not taking loans to ramp up their inventories, and they are not pushing for better deals from manufacturers and dealers in anticipation of good festive sales.
And their valuation is not entirely incorrect.
Between January to March this year, ecommerce sales reduced by 19%, compared to same period last year; and between April to June, sales reduced by 5-10%.
As ecommerce portals have been forbidden from giving massive discounts, sellers are feeling the pinch of lower sales, hence lesser expectations from the festive season.
Even smartphone niche witnessed lesser sales, as numbers dropped by 7% to 28% for the quarter ending June.
Sanjay Thakur, president of E-Seller Suraksha Forum, a forum of 5000 online vendors, said that some vendors have experienced lower sales to the tune of 50%, due to various factors.
In recent days, ecommerce portals have started geo-tagging sellers, which means that if a customer from Mumbai orders a product, then sellers from nearby locations would be provided the order, rather than an open system. This also has been attributed to lower sales for some vendors.
Harshvardhan Lunia, co-founder & CEO of Lending Kart said, “We are aware of the fact that bigger vendors have lost out revenue..”
It would interesting to observe how this festive season turns out for the ecommerce industry – Can Amazon and Flipkart, along with Snapdeal be able to lure customers despite giving lesser discounts? Or the customers will chose traditional mode of shopping, and give ecommerce a miss this time?
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