Source: ETRetail.com, Sept 17, 2020
BENGALURU: E-commerce companies are expected to post nearly 50% jump in gross sales to $4 billion this Diwali, a two-year high, during the five-day sale events of Flipkart, Amazon India and others, according to the latest estimates from market research firm Redseer.
With Covid-19 accelerating digital adoption and traditional offline shoppers moving online, the festive season is expected to see an over 70% jump in consumers with 45-50 million digital buyers. Of these, over 50% are likely to be from tier-II cities and beyond, Redseer estimates. The entire festive month is expected to clock gross sales of $7 billion in 2020 against nearly $4 billion last year, a 75% jump.
The date of the much-publicised sales are yet to be announced, but e-tailers have started working with brands, sellers and logistics players in the run-up to the event likely next month. Industry executives are also working with sellers and brands to overcome supply-chain and investment issues to meet the surge in demand.
“Technically, what demonetisation did to the payments space, Covid-19 has almost done it for the e-commerce space. We are expecting a higher number of shipments than what we are seeing currently. In peak time, it should be 7.5-8 million shipments a day. We have already planned for the season and now the implementation will happen,” said T A Krishnan, co-founder and CEO, E Com Express, a third-party logistics company catering to online platforms. According to him, the industry is currently shipping about 5-5.5 million items daily.
Last year, the average shipments during the festival season were under 5 million.
According to industry sources, grocery, FMCG and general merchandise will drive higher volumes due to Covid-induced demand. Typically, smartphones, electronics, small and large appliances and fashion dominate Diwali sales.
“The estimates are very realistic. There is a significant higher adoption of digital in non-metro cities. In terms of consumer behaviour during pre-Covid-19 era, we had seen some spurt in online penetration but this is the first time that there has been a sustained and significant movement towards digital — with e-commerce penetration jumping to 5% compared to 3% last year,” said Ujjwal Chaudhry, associate partner, Redseer.
This year’s sales are also likely to happen when there are signs of a gradual economic recovery compared to last year when overall spends were muted owing to the broader slowdown in the economy, Chaudhry added.
“I am diversifying into new categories like handicraft items, Diwali lights as there are supply issues in segments like electronic accessories,” a Delhi-based online seller said. Emails sent to Flipkart and Amazon India did not elicit any response.