The e-tailers seek to overcome the blues of the slowdown on holidays
BENGALURU Electronic commerce The companies expect to be able to counteract the economy's recession during Diwali's anticipated sales later this month, the biggest sale in a year. More than half a dozen industry stakeholders: e-tailers , brands, sellers, analysts - they said TOI It is possible that the upcoming holiday sales will not cause consumers to stop with their expenses, unlike the automobile sector or fast-moving consumer goods in rural areas. However, the growth rate of this holiday sale could be lower than last year, according to some analysts.
The start of the sales season will be Flipkart , which will hold its flagship sale event Big-BillionDays from September 29 to October 2, the Walmart-owned e-tailer has informed sellers. Amazonas’s dates for its Great Indian Festival are not public yet but it is usually in the same period as Flipkart’s since both compete against each other to corner a higher volume of sales.
Speaking to TOI Manish Tewary, VP, Amazon India, said the company did not see any signs of a slowdown in its last two sales and expects to double down on the momentum going into the festive season. “We will be launching a range of new products during the Diwali sales. If products were not moving, then there would not be new launches,” he added. Tewary, virtually the second most senior executive in Amazon India, said Amazon will gradually announce these launches in September.
“For any kind of macroeconomic trend to deter e-commerce would be difficult since it’s (online commerce) still relatively small compared to the overall retail market,” he added. Both Amazon and Flipkart have stitched up various partnerships with third-party brands across segments like smartphones, large appliances, electronics and fashion among others. A Flipkart spokesperson did not respond to an email query sent by TOI .
Last year, e-commerce sales grew 33% during annual festive sale events, to a total of $ 2-2.3 billion, market research companies such as Forrester and RedSeer said. So far, these agencies have not issued a formal statement, but Forrester senior forecast analyst Satish Meena said this year that sales growth could be around 20%. RedSeer said TOI it is expecting at least as much growth as last year during the five-day sale when Amazon and Flipkart start their respective events.
Raghu Reddy, head of Xiaomi’s categories and online sales in India, echoed Tewary. “Based on shipment numbers, both the first quarter and second quarter have grown compared to 2018. So, based on this, one would assume the trend would continue in the festive sales,” he said. Xiaomi is one of the largest selling smartphone players across online and offline channels. For Flipkart, an additional worry could be that about 35 of its sorting centers across the country are not functioning as they have not met compliance standards as per local laws. This may affect the overall pace of delivery, people aware of the matter said.
While companies and brands seem confident in registering good sales, some executives are also cautious with sales estimates. “Retail sales have been low single digits in offline stores. There will be an additional volume of merchandise from the old season in fashion on all online platforms. This may trigger an additional discount on these items, but brands are concerned about the general drop in average consumer spending, said the executive director of a clothing brand. A New Delhi-based seller also said he anticipated an impact on overall volumes, but that they will not be affected as much as other consumer sectors.
For fashion brands, e-tailers typically sell a mix of old and new season merchandise. Fashion brands restrict some of their new season merchandise to the offline stores for consumers who want to buy the new arrivals, willing to pay a premium.