Bargain hunting Indians help e-commerce companies shore up GMVs
With less than a week to go before the e-commerce sites unleash their yearly dose of 'festive sales' here's just how much Indians love to shop especially during sale days.
- Festive sale days in October 2016 saw the highest GMV brought in by the industry at $210 million per day.
- Flipkart grabbed the highest share of the GMV at 43%.
- While Amazon was at second place with 32% GMV market share in the October 2016 sale.
Indians have long been made fun of for their shopping habits where popular soaps and hysterical comedian jokes revolved around the nation’s love for a good bargain.
This proved to be true when it came to patronisers of the festive sale days put up by e-commerce websites in India.
With less than a week to go before Flipkart and Amazon throw the floodgates open to put up their own offers on a variety of products, a report by RedSeer Consulting on Tuesday analysed the past editions of sales and what worked for the e-commerce companies.
Lured in by the attractive deals on products, Indians flocked to these sites to make the most of their yearly shopping.
The report showed up to 450% jump in the gross merchandise value (GMV) generated during the sales as compared to the period before it.
In the period July to September before the festive season in India kicked off the average GMV of e-commerce sites was estimated to be $37 million per day in 2015 and $38 million per day in 2016.
In the October 2015 festive sale days the report said an average of $144 million in GMV was collected by the sites which was a 300% jump from regular days.
While in October 2016 festive sale day GMV reached $210 million which was a 450% jump from regular sales and 50% jump from the previous year’s sales.
This was the highest ever industry GMV levels of $210 million per day, the report said.
Some argued that the products on sale were not priced differently from the original price of the products. However to lay any emphasis on this aspect of e-commerce sales would now only lead to a conjecture.
During the festive sale days, Flipkart emerged on top of its game and garnered 43% of the total GMV during the October 2016 sale, the report said.
This would estimate Flipkart’s total GMV on each day of the sale in October 2016 at $90 million. While Amazon’s GMV amounted to $67 million.
“As with 2015, Flipkart emerged as the leader during the 2016 festive days as well with ~43% GMV share. Driven by wide selection and offers coupled with robust delivery and targeted marketing, Flipkart could gain a lead over aggressive competitors in the crucial part of the year- setting the stage for its revival since then,” the report said.
The success of the sales was reported by RedSeer as follows:
- Widest-ever selection with multiple exclusives
- Better than ever operations execution
- Higher than ever acceptance of EMI/buyback offers, which strongly pushed sales of high-value items
- Strategic discounting on key SKUs and categories
- Extensive usage of digital marketing for targeted reach-outs
“The 2016 festive sales was truly a milestone for the industry. Its unprecedented success set the stage for industry revival in last quarter of 2016 onwards after a challenging year. E-tailers can take multiple lessons from the success of the event to ensure that the success continues at a much bigger scale in 2017,” Anil Kumar, Founder and CEO, RedSeer Consulting said.