Sale during prime day doubled against previous year: Amazon's Amit Agarwal

Rank 3 | Amazon | E-commerce company (Image: Amazon)

US-headquartered Amazon on Tuesday (October 9) said its sale during the first ten hours of early access given to prime members doubled the numbers reported during the 12 hours of prime day of the previous year.

The company, which kick-started its six day flagship sale event The Great Indian Festival, expects sales for all days to be much "bigger and explosive".

“We opened up prime early access for 12 hours. In the last 10-10.5 hours prime early access was already two times of what it was last year so we have seen people shop 100 percent more than they shopped the last year,” Amit Agarwal, Country Head, Amazon India said, adding that this sale will help the company break into the next 100 million customers in India.

Agarwal was speaking to the media just a few minutes before the midnight sale started.

While he did not comment on the growth in sale expected during the six day sale period, he said that typically the first ten hours of an open day is much “explosive and bigger”.

Rival Flipkart, which got acquired by US-based retailer Walmart for USD 16 billion, has also rung up its flagship sale The Big Billion Days the same day.

The stakes this year are high for Amazon as this time it fights Walmart in India much like the two behemoths compete in their home country.

“The stakes are high for us every single day. From our perspective trust is very easily lost, hard to earn. So it is not what we do in a five day or 30 days period that backs our future but what we do on a daily basis,” said Agarwal.

“We will leave the debate of who is bigger aside. For us what matters is building the next cent of very loyal customers that fuel the next five years of growth,” he added.

While the two companies haven’t disclosed the amount of sale expected during festive period, according to research firm Redseer Consulting, online retail firms led by Amazon and Flipkart may generate about USD3 bllion of sales during the five day period this year.

Amazon currently claims to have 150 million registered customers and India and is now looking to tap the next 100 million customers which will come from Tier 2-3 cities.

Small cities are important for Amazon with over 50 percent of sellers and 65 percent of customers coming from Tier 2 and 3 cities. Last month it also launched a Hindi version of its mobile app to deepen its presence in the smaller towns.

Agarwal said that the idea was to tap the customer base who would browse but would not shop.

“Now we are seeing a large part of that convert for the first time after the Hindi launch.

This period would allow us to break into meaningfully to the next 100 million just because the efforts are very focused on making things more affordable, and (introduction of) vernacular language,” he said adding the more languages will be launched soon.

Some of the top selling items on the Prime only day were smart television and phones.

The next 100 million customers indeed is a crucial number both for Flipkart and Amazon who lock horns for market leadership.

Agarwal claims Amazon to be the market leader even as the Flipkart Group that houses Myntra and Jabong besides Flipkart claimed to have garnered 80 percent market share during the sale season last year.

Flipkart is now focusing on low-priced items such as unbranded fashion and recharges, besides affordable payment options and Amazon is sticking to its tag line of being a platform for everything a customer needs.

To be sure, Flipkart's majority of the business comes from categories such as mobile phones.

“The challenge out there is to make sure that you are offering a daily convenience so that it becomes a daily habit and we through our focus across the board across categories see that happening. Prime is a good indication for us. So our objective is how we convert these 100 million into prime and prime up the next 100 million to start shopping so that over time they become prime members,” said Agarwal.

Over the last few years the awareness for e-commerce festive sale has been growing with social media and the television being the biggest source of awareness.

Mobile phones and fashion are the two most popular categories among the customers.

The willingness to purchase during the Diwali season has increased from 79 percent in 2017 to 100 percent in 2018, owing to the increase in discounts and promotional events run by the e-tailing platforms says Redseer adding that around 29% of the people surveyed by them plan to buy a mobile phone this sale season followed by 27% who want to buy fashion.

Interestingly, India which has conventionally been a cash economy with over 90 percent of e-commerce sale happening in cash, is witnessing a gradual shift by customers opting for digital modes of payment.

Around 26 percent of the customers said they used debit cards for making payments while 23 percent said they used cash on delivery in the Redseer report. Multiple offers given to them in partnerships with banks have fuelled the usage.