Breezy start to ecommerce festive sales, 28% growth in first 2 days

The data do not include smartphone sales.

Unicommerce said personal care, which includes products like lotions, hair dyes, lipsticks, cosmetics, creams, deodorants, and bath soaps, was the fastest growing segment with a more than 70% increase in order volumes in the first two days.

New Delhi-based Unicommerce provides a platform for warehouse and inventory management and omni-channel retail for ecommerce companies like Myntra and Boat. It analysed and compared data of more than 7 million orders that were processed for the findings.

The electronics segment has reported a 48% volume expansion, driven by audio products and smart wearables.

In the fashion category, the largest in terms of order volumes, the growth was 7%. Other segments such as home decor, gifting products, furniture, and jewellery also witnessed strong growth, the data indicated.

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Speaking to ET on Sunday morning, Manish Tiwary, vice president and country manager at Amazon India, said the festive season has shown stronger demand across categories, easing off worries of inflation impacting sales.

ET had reported on July 25 that ecommerce sales were muted earlier this year and etailers were hoping for an uptick in demand during the festive period.

“There was nervousness … but it has been a very positive surprise for us ahead of the expectations. Customers are spending, all our brand partners, sellers are feeling a lot more comfortable. A strong start is what defines what will happen for the rest of the season,” Tiwary said.

Walmart-owned Flipkart said on Friday that products like laptop, smartwatches and audio products are driving its sales in the electronics category. Sources aware of the matter said the early trends of higher sales at Flipkart held true as of Sunday morning.

Smartphone sales, the main driver of ecommerce festive sales over the years, are expected to decline this year with a 9% drop in terms of total shipments by manufacturers, according to estimates by market research firm Counterpoint. During the festive month, the report said, consumers are expected to place orders worth $7.7 billion for smartphones, compared with sales of $7.6 billion last year. This estimate of only a marginal increase in online orders comes despite the expected launch of 5G services in India in October.

Realme, one of the biggest smartphone makers in the country, told ET that it is forecasting a 10% jump in volume this festive season, with a target to sell 6 million smartphone units and 1.7 million artificial intelligence-of-things products across channels.

Tiwary of Amazon told ET that the consumer demand this festive season is split equally between metro and non-metro cities, and that the company is making further inroads into small cities.

Data from Unicommerce showed there is 32% year-on-year growth in festive order volumes from tier-III cities and over 20% from tier-II cities. Top cities reported a 28% increase in order volume.

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As much as 70% of Amazon India’s new prime members since the start of the festive season have come from tier-2 cities and beyond. The local arm of the US-based etailer said its Prime member sign-ups grew 1.9 times than last year. Amazon charges a fee from Prime users offering a range of services including faster delivery, online streaming and others. Though Amazon has not disclosed the number of Prime members, brokerage firm Benrnstein estimates the number in India to be more than 5 million. Globally, it has over 200 million Prime users.

Ecommerce firm Meesho said it saw an 80% jump in orders compared with regular days, clocking about 8.7 million orders on the first day in sales. Flipkart said it witnessed concurrent users on the app at 1.6 million per second during its first day of the flagship Big Billion Days sale.

Flipkart said the makeup and fragrance category saw high traction among consumers.

Across ecommerce firms, demand is also being driven by the affordability constructs setup by ecommerce firms to nudge users to make the purchase. These are typically financing options in partnership with banks and lending partners offering EMI payments for big-ticket purchases.

“It is not just about pricing, and product things like affordability make a huge difference,” said Amazon’s Tiwary. “Close to 50% of customers are opting for EMI or BNPL (buy now pay later) vis-a-vis last year. The offering put together is what is working.”

Flipkart echoed the same, saying its affordability products have seen healthy growth during the festive season sale so far.

Bombay Shaving Co, a consumer care brand, is seeing a 2.5-time jump in sales compared to last year’s sales on Amazon and Flipkart, its chief operating officer, Deepak Gupta, told ET.

According to a report by market research firm Redseer, the month-long festive season sales will likely record gross merchandise value of $11.8 billion, up 28% from last year.