Call it the pent up demand due to the pandemic or consumers holding on to their purchases for the festive season, there is a huge surge in sales expected on e-commerce platforms this month. Driving this year’s growth are also factors such as the acceleration of digital payments and consumers in tier 2 towns and beyond taking up online purchases. As millions of customers shop from small sellers listed on Amazon.in during the early days of the month-long festive sale, Amazon India Vice President Manish Tiwary in a conversation with Business Today talks about the major trends across sellers, consumers, and categories.
Amidst the COVID-19 pandemic and the second wave earlier this year, what is the market sentiment for the upcoming festive season?
In the last one year, the pandemic created unprecedented challenges for people and economies globally and India has been no exception. As 'stay at home' and 'work from home' became the new normal, we saw the critical role e-commerce has played to serve people in the safety of their homes. In the face of this disruption, it is heartening to see how lakhs of sellers, delivery and logistics players and others step up to serve and support customers.
The pandemic has accelerated technology adoption which has brought a structural shift in online shopping behavior and we are seeing more and more customers coming online for their shopping needs. Through this period, sellers on Amazon.in have seen high demand in categories such as groceries, work-from-home (WFH) and online schooling enablers like laptops, smart devices, headphones, furniture, consumer electronics and apparel amongst others. In fact, grocery as a sub-category grew more than 2X post-March last year and became a gateway for new customers on Amazon.in.
We have also seen increasing demand for products across categories including a steep rise in demand for medical equipment and supplies and products that enable WFH. Our immediate focus is to help customers find all that they need from the safety of their homes and to help small businesses restart within the constraints of the current situation.
Talking about the customer demand, learning how important role Amazon and e-commerce can play for our customers as well as for small businesses and the economy. Last 15-18 months, we have seen a lot of customers move online; 65 per cent of customer orders and over 85 per cent of new customers on Amazon.in are from tier 2 and below geographies. Customers across nearly 100 per cent of India’s serviceable pin codes are shopping with us.
What kind of sales are you expecting for your consumer categories this festive season?
Amazon Great Indian Festival 2021, our month-long festive celebrations, have gotten off to a strong start, with millions of customers buying from small sellers listed on Amazon.in, including local shops, start-ups and brands, artisans, weavers and SMBs (small and medium businesses).
During Prime Early Access on October 2, the number of local shops participating in the event more than doubled compared to last year. We also saw a 60 per cent increase in sellers who received their highest-ever single day sales year-on-year on Amazon.in; the number of sellers receiving an order from tier 2/3 cities jumped by 21 per cent and 16 per cent more sellers received orders over last year. Prime subscription continues to be a customer favourite across India, with two out of three new Prime sign-ups coming from tier 2/3 cities and customers shopping in eight Indian languages. Early data for Day 1 indicates a strong start across categories for the month-long festive season and we are excited by the momentum and the opportunity to serve customers and enable sellers to bounce back, and safely deliver #KhushiyonKeDibbe at their doorsteps during this festive season.
As salary cuts and job losses have impacted the consumer segment big time, do you plan to introduce some special offers to facilitate purchases on your platform?
Amazon.in’s biggest celebration -- the Great Indian Festival -- brings a host of never-seen-before deals and offers on unique products from lakhs of sellers, SMBs and popular brands. Customers can get amazing deals on the widest selection of products from top brands across categories including smartphones, appliances, TVs, consumer electronics, fashion and beauty, Amazon Devices, home and kitchen and more. Customers will also have the opportunity to shop for unique products from thousands of Amazon sellers under various programs such as local shops, Amazon Launchpad, Amazon Saheli, Amazon Karigar, and enjoy deals and offers extended by lakhs of small businesses.
The Great Indian Festival would include over 1,000 new product launches from top brands such as Samsung, OnePlus, Xiaomi, Sony, Apple, Boat, Lenovo, HP, Asus, Fossil, Levi’s, BIBA, Allen Solly, Adidas, American Tourister, Prestige, Eureka Forbes, Bosch, Pigeon, Bajaj, Big muscles, Lakme, Maybelline, Forest Essentials, The Body Shop, WOW, Nivea, Dabur, P&G, Tata Tea, Huggies, Pedigree, Sony PS5, Microsoft Xbox, Hasbro, Funskool, Philips, Vega and more. Customers can save up to Rs 5,000 during the Great Indian Festival by making daily payments like sending money, paying bills, booking tickets and more to unlock exciting shopping rewards that can be redeemed during the shopping event. Also, they can extend their budget even further with Amazon Pay Later and Amazon Pay ICICI Bank credit card.
We have announced the launch of 'Prime Fridays' for Prime members throughout this Great Indian Festival. Starting October 8, Prime members can enjoy amazing offers, epic savings, shopping benefits across categories, entertainment on Prime Video and Prime Music, and much more throughout the month-long festive celebrations. Prime Fridays bring together the best of Prime on a single day when Prime members can look forward to a host of exciting offers and savings across categories including smartphones, consumer electronics, TVs, appliances, Amazon devices, fashion and beauty, home and kitchen, furniture, and much more.
What have been the major trends that you have witnessed in the last few years, and which amongst them, do you foresee will follow for the next two to three years?
The festive season has already begun for us, we recently concluded Onam and Rakhi shopping store on Amazon.in and observed new trends on all three fronts -- sellers, consumers, and categories. We have also announced this year’s Amazon Great Indian Festival from October 3 with early access for Prime members from October 2 with the theme of “Boxes of Happiness for every home”.
Talking about the trends, on the seller front, more and more local shops are coming online to sell. We have seen it over the last few months and believe that it will peak during the Diwali festival. Secondly, a large number of sellers coming online are from smaller towns which are similar to the customer mix who shop on Amazon.in.
On the category front, with customers shopping online, the one which has picked up momentum from last Diwali is groceries. Additionally, some new categories which have grown rapidly over the last 12 months, are personal grooming, sports; a lot of categories are around hobbies. These categories have grown over the last 18 to 20 months and we expect this trend to peak during Diwali. Besides this, in the large businesses of fashion and beauty, electronics and daily essentials, we expect the trends to be largely in line with last Diwali.
What percentage of your overall sales are generated on your platform during the festive season?
Consumption is getting stronger and stronger with more and more consumers getting comfortable shopping online. It is very important for us and whenever we talk about customers, we do not look at the transactional value of a customer. We look at the relationship value to get the customer shop online and what they would do online for years to come.
Do you think the global semiconductor shortage will impact the festive projections?
We cannot comment on the issues as we are a marketplace. However, we closely work with brands and our selling partners to offer a seamless shopping experience to customers.
With a lot of competition, how are you looking at differentiating yourself?
We are unusually passionate with customers and laser-focused on providing the best online shopping experience to our customers with the largest selection of products at great value, convenience and safely deliver them at their doorsteps. We remain obsessed every day, knowing fully well that customers will shop with us only until the very moment they find a better experience elsewhere. This is what keeps us on our toes.
We are humbled by the momentum and that we are India's largest store and most trusted marketplace with more than 8,50,000 SMBs selling hundreds of millions of items to customers to every corner of the country. We feel confident given the way our sellers are preparing for it, the infrastructure and support which we have created, this Diwali should be good for sellers and of course our consumers. Customers can look forward to shopping from a wide selection of products across categories like fashion and beauty, grocery, smartphones, TVs, laptops, appliances and much more from the comfort and safety of their homes.
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