Driven by smartphone sales, e-commerce platforms like Amazon, Flipkart, and others have recorded cumulative sales worth Rs 24,500 crore ($3.5 billion) in the first four days of the festive season, growing 30 percent over the same period last year, according to management consulting firm Redseer.
“Much like last year, around 47 percent (around Rs 11,000 crore) of the gross merchandise value (GMV) is on account of phone sales as customers wait for the festive season deals to make the purchase,” said Ujjwal Chaudry, Partner at Redseer.
With the spending on phones having gone up by 20 percent in the first four days of the festive season, compared to the corresponding period last year, the company estimated that around 1 crore phones will be sold by the end of this week.
This rush to buy phones is being driven by offers on Apple iPhone 12, Apple iPhone 13, and OnePlus phones even as mobile phone sales saw a 10X jump during the period compared to business as usual (BAU) days.
Fashion has also been one of the drivers of the festive rush on e-commerce platforms – an estimated Rs 5,500 crore worth of apparel, footwear, and fashion accessories were sold in the first four days. This was a jump of 4.5 times over BAU days.
Despite the growth in sales, the average ticket size of purchases during the first week of the festive season is estimated to remain similar as last year. While the ticket size is expected to be around Rs 5,400 in the first half of the festive week of 2022, it was in the range of Rs 5,000- Rs 5,200 in the festive sales of the last two years.
“The average ticket sizes have been trending downwards over the years – from Rs 7,350 in 2018 and Rs 6,750 in 2019 – as the share of smartphone sales in the total festive GMV is coming down,” said Chaudhry.
Moneycontrol reported earlier that as the scale of freebies and social media ads to attract traffic during sales have gone back to pre-pandemic levels, online sellers are seeing a simultaneous spike in their cost-per-click (CPC) and declines in conversion ratios.
This is because sellers have to bid for search terms that consumers use to discover products on e-commerce portals. Industry insiders are of the opinion that aggressive bidding by private labels of e-commerce players, digital commerce arms of large legacy consumer brands and a multi-fold rise in the number of merchants selling online over the past few years have contributed to the race for keywords.
“The online seller base has doubled from around 4-5 lakh during last year’s festive sales to around 10 lakh now. This has led to more competitiveness on the marketplaces and hence the higher CPCs,” he said.
“Sellers are also more bullish and hence more aggressive with discounts this year… However, the average cost of sales still makes strong sense in general,” he added.
Redseer said that its projected figure of Rs 41,000 crore of e-commerce sales in the first week of the festive season is expected to be achieved. It also pointed out that the share of Chinese goods being sold on the e-commerce platforms has been consistently decreasing as sellers have to mention the country of origin.
