Flipkart-Amazon rivalry heats up India’s online shopping season

NEW DELHI – India’s e-commerce scene heats up as Walmart-owned Flipkart and Amazon kick off annual fall festival sales on October 3, offering deep discounts on products ranging from smartphones to home appliances and the go by clothes. In total, sales are expected to reach over $ 9 billion.

Flipkart, a local e-commerce platform, and the Indian arm of Amazon are each said to have market shares of over 30% in the country’s online retail market. The two main players have moved ahead with the launch of their fall sales and will start on the same day instead of their original plan which was due to start on October 7 and 4 respectively, underlining the struggle for a larger share of Indian bargain hunters.

Amazon and Flipkart have decided to launch their sales promotions during Shradh, which started on September 20 and will run until October 6 of this year. During Shradh, Hindus remember their deceased ancestors. It is traditionally regarded as an inauspicious time to shop for clothes, jewelry, or other household items. In past years, both companies have launched their sales at the nine-day Navratri Festival, which comes after Shradh.

“They cannot allow [their rival] to start selling earlier, ”Arvind Singhal, chairman of retail consultancy Technopak Advisors, told Nikkei Asia. “If the sale starts earlier [for one seller] and customers end up buying goods, they won’t buy on the other platform three days later, ”he said, pointing to the intense competition between Amazon and Flipkart.

Singhal pointed out that young people don’t care much whether the sales take place during Shradh or festivals, and will buy whenever the offers are attractive. He added that the economy appears to be in good shape as daily COVID-19 cases decline, offices reopen, and people dine and travel again. “As a result, no business wants to miss an opportunity for consumers to spend money on merchandise.”

Amazon’s fall sales event in India will feature more than 1,000 new product launches from top brands including Samsung, OnePlus, Xiaomi, Sony and Apple. © Reuters

The number of daily COVID cases in India fell to less than 30,000 from a peak of over 400,000 a day in early May. The country has so far confirmed more than 33.7 million cases, just behind the United States

Amazon has revealed some of the deals it plans to bring to smartphones at its “Great Indian Festival” event, including handsets from Samsung, Vivo and OnePlus. Samsung’s Galaxy Note 20 – which was available on its website for 55,400 rupees ($ 745) on Thursday, a discount of around 30% – will sell for 44,999 rupees during the sales period. The price of Apple’s iPhone11 will also be reduced by 54,900 rupees. The sale price has not yet been announced.

The U.S. e-commerce giant has partnered with HDFC Bank to offer automatic 10% discounts on purchases made during the sales period, further softening offers for customers who purchase with credit or debit cards from the bank. Amazon did not specify the duration of the sale, but it is expected to last a month – until the Diwali festival on November 4 – as it did last year.

Flipkart has similar ties to Axis and ICICI banks for its “Big Billion Days” sale, which will run through October 10. The online retailer will offer discounts of up to 80% on electronics, appliance and fashion brands including Philips, Lenovo, LG, Whirlpool, IFB and Puma. The company has some impressive deals on low-end smartphones. For example, the Realme 8i will be priced at Rs 11,999, which is less than the 18% discounted price of 12,999 that it was offering on Thursday.

A robot assembles a cardboard box at a Flipkart distribution center on the outskirts of Bangalore in southern India. © Reuters

Flipkart said on its website that it would offer its “craziest price” on the iPhone12, the 64GB model of which was available on its website for 63,999 rupees before the sale. “In addition to the ongoing discounts, there will be deals and surprise offers every hour,” the company said.

Pulkit, an 18-year-old student in New Delhi who bought an iPhone 11 last month, regrets not waiting for the sale. “After reading about these upcoming online deals on smartphones, I think I could have gotten a better deal if I had bought my phone during the festival sales,” he said, adding that he would now be looking for deals on cameras and laptops. .

Other ecommerce sites also have offers during the holiday season, but none can match the buzz created by the Flipkart and Amazon sales events.

This year, the gross value of goods (GMV) of online sellers, or the total value of items sold, is expected to increase 30%, year over year, to $ 4.8 billion over the course of the year. the first week of sales, when most purchases are made. . Sales could reach more than $ 9 billion in the holiday month, up 23% from $ 7.4 billion last year, according to consulting firm RedSeer, which expects that mobile phones, electronics and household appliances, and fashion are the top three sales categories.

“The growth will be primarily driven by accelerated online adoption, which has been seen as an effect of COVID,” said RedSeer, adding that the holiday season will be the icing on the cake for the online retail industry. 2021, which has been supported by a rapidly growing customer and seller base throughout the year.

India’s total online GMV is expected to reach $ 49-52 billion in 2021, up from $ 38.2 billion last year and $ 27.1 billion in 2019, RedSeer said in a report on the sales of the festival season.

Members of the Confederation of All Indian Traders gather in New Delhi to protest Amazon founder Jeff Bezos’ visit to India in January 2020 © Reuters

Besides the tailwind of digital adoption, seasonal sales “will be able to capitalize on the emotions of the gifting season in India,” said Shahan South, investment professional at Indian Angel Network.

Amazon’s sales event will include more than 1,000 new product launches from top brands including Samsung, OnePlus, Xiaomi, Sony, Apple, Boat, Lenovo, HP, Asus, Fossil, Levi’s, Bosch and others, it said. the company in a press release. He also announced the creation of more than 110,000 seasonal jobs before the sale, which he said “will help strengthen our fulfillment, delivery and customer service capabilities.”

Although in-person shopping has also recovered as the second wave of COVID subsides in India, the Confederation of All Indian Traders, which represents more than 70 million traders nationwide, remains on alert. In a September 27 statement, he accused Amazon and Flipkart of adopting a business model that makes consumers “accustomed to buying cheap products” in order to drive competitors out of the market and charge higher prices to the market. to come up. The high concentration of shopping during the shopping festival can also increase friction between online and offline retailers.

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