Online or offline, festive season sales are when customers choose to make their big purchases, in the expectation of getting the steepest discounts.
On the ecommerce front, they generally flock to Amazon, which runs its Great Indian Festival sale, and Flipkart, with its Big Billion Days sale, to do their shopping. Others, such as Meesho, Nykaa and Purplle, also hold festive season sales at this time and have seen some traction. So, which of the contenders was the big winner this year? Well, the Amazon and Flipkart sales, which both commenced on the same date (October 8), have been underway for three weeks, and have thrown up some category winners. But there does not appear to be an overall winner yet.
Industry players say both Amazon and Flipkart have emerged as clear winners in specific categories. Amazon was the platform of choice for players in the healthcare space (nutraceuticals, gym equipment and the like), while Flipkart maintained its edge when it came to smartphones and wearables this festive season.
“There's a category play this festive season. So, when it comes to electronics and mobile phones, Flipkart has an edge over Amazon, because it started earlier and has more depth in the category. Flipkart’s seller base and supply chain is also better in that particular category,” said Ashish Dhir, Executive Vice President (consumer and retail), 1Lattice.
For Ganesh Sonawane, the CEO of D2C brand Frido, which makes orthopaedic insoles for shoes, Amazon takes the cake. “Amazon for us is seven to eight times of Flipkart. For most of them in the healthcare space, especially in the premium space, Flipkart is very insignificant,” Sonawane said.
“Sales wise, Amazon averages at Rs 10 lakh in a day for us and Flipkart is Rs 80,000-90,000 a day. During the sale time, Amazon went to Rs 28-30 lakh a day, and Flipkart went up only to Rs 3 lakh a day,” he said.
Not just Frido, other players catering to customers in the premium space said Amazon was the platform of choice. Amazon typically has an average order value (AOV) of Rs 1,200 (Rs 2,000 for Amazon Prime customers).
“Our total sales were tipped in favour of Amazon this festive season. That is the trend even generally because we started early on Amazon and for premium products they have a slightly more relevant audience than Flipkart,” said Sibabrata (Shibam) Das, co-founder of Atomberg, which makes smart fans. Within five days of the festive season sales, the nine-year old company exceeded the entire e-commerce revenue that it had clocked in FY20, underscoring the strong demand this year.
One of the big themes this festive season is customers’ willingness to purchase premium products, a trend that has been broad-based and not restricted to only a few categories. For instance, iPhone sales crossed 1.5 million units during the first week of festive sales for the first-time ever.
“The premium segment witnessed significant growth on both platforms. On Flipkart, the premium segment growth was almost 50 percent year-on-year (YoY) driven by the iPhone 14 and Galaxy S21 FE, while on Amazon the segment growth was almost 200 percent YoY driven by the iPhone 13 and Galaxy S23 FE,” said Tarun Pathak, Research Director, Counterpoint Research.
Customers’ willingness to spend more was one of the likely reasons why e-commerce platforms reduced discounts by a notch this festive season.
“Brands need to start making money now. The discounts are more in line with what they should be. Very deep discounts, like reducing prices by 70-90 percent, don't sound logical and are not correct,” said 1Lattice’s Dhir.
He attributed the move to the changing power equation between brands and platforms. Brands now have more control over pricing, unlike earlier, when platforms dictated the terms, he said.
Making headway
Amazon and Meesho have both gained some market share in categories. “In the wearables category, Flipkart typically has a market share of around 65 percent but this festive season Amazon may be able to gain some share. Amazon’s share may increase from 35-40 percent to 45-50 percent,” said Navkendar Singh, Associate Vice President with IDC India.
Similarly, Meesho, the low-priced e-commerce platform, also made gains this festive season. The SoftBank-backed company said it had seen 16 million new app downloads this season.
“India is a big market and all e-commerce players can coexist. But yes, there will be some impact on existing players like Amazon, Flipkart and Myntra when a newer player like Meesho enters and starts doing well,” 1Lattice’s Dhir said.
Flipkart takes beauty
Large and small players in the beauty and personal care (BPC) segment said Flipkart was their platform of choice this festive season.
"This year we recorded our highest ever festive period spike. The curve for Flipkart was slightly more pronounced than Amazon, with both businesses growing 4X and 2.5X respectively,” said Deepak Gupta, co-founder and COO, Bombay Shaving Company.
Even Ghazal Alagh, co-founder of Mamaearth, which goes public on October 31, said Flipkart brought in more sales for the company than Amazon.
“For Mamaearth, which is a big brand, Flipkart would be equal if not larger than Amazon. But Nykaa and Purplle would be smaller. But for our younger brands like Aqualogica and The Derma Co, Nykaa would be bigger, followed by Amazon and Flipkart. So, the journey of the brand decides which platforms will bring a larger push for them,” Alagh said.
(With inputs from Mansi Verma in Mumbai)
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