The International Monetary Fund (IMF) warned that the global economy is now in a "synchronised slowdown" and 90 per cent countries will see slower growth in 2019. Back home, the Reserve Bank of India (RBI) seems to have acknowledged the growth slowdown. The central bank has cut the economic growth projection for 2019/20 to 6.1 per cent from the earlier 6.9 per cent. Auto industry and the FMCG sector have been pointing out the same for months now. But a report from Bengaluru-based consulting firm RedSeer pegged the festive gross sales (between September 29 and October 4) of largely two big e-commerce companies, Amazon and Flipkart, at a whopping $3 billion or Rs 19,000 crore. So, did consumers really spend such a staggering sum in just a week?
Despite challenging macro conditions, the RedSeer report says, festive sales have seen a year-on-year growth of 30 per cent with significant share coming from customers in Tier-II cities. The report further adds that "the biggest theme of the festive season was 'value shopping' as indicated by large chunk of customers from Tier-II cities, who shopped online owing to wide selection supported by affordability initiatives".
Mobile as a category led the sales contributing over 55 per cent ($1.5 billion) to GMV during festive days. The report also expects the whole month of October to report nearly Rs 39,000 crore in sales. Both the big boys (Amazon and Flipkart) termed the first leg of their respective six-day sales as the best ever till date.
Flipkart in its statement said that the fashion category witnessed a 70 per cent growth in sales compared to last year and nearly 40 per cent of all new customers came through fashion. Mobile category for Flipkart saw the biggest festive season sale. Kalyan Krishnamurthy, CEO of Flipkart Group said, "We take immense pride in making e-commerce more inclusive through the introduction of some top categories which during this festive season have been able to cater to the needs of Tier-II markets and beyond."
Amazon too said that the first leg of the sale was its biggest one. Leading research agency Nielsen said that Amazon India witnessed the highest share of transacting customers and purchases across all online shopping platforms during the first five days of the Great Indian Festival period. Smartphones as a category saw 15x growth led by brands such as Samsung, OnePlus, Apple, Xiaomi and Vivo. The company said one out of three premium smartphones were bought on EMIs. Amit Agarwal, Senior Vice President and Country Head, Amazon India said, "The first wave of the Great Indian Festival was our biggest celebration ever with Amazon.in witnessing the highest share of transacting customers and purchases across all marketplaces in India; orders from 99.4 per cent pincodes."
While Amazon and Flipkart together amassed 90 per cent share, other players contributed 10 percent to the overall GMV of $3 billion. Redseer pegged Flipkart's market share of 'The Big Billion Days' at 60-62 per cent, while Amazon's 'The Great Indian Festival' at 28-30 per cent market share. Flipkart has no comments to offer on the market share report. Amazon rubbished it saying that they "cannot comment on speculative reports that lack robust and credible methodology".
So, how much sales did these companies actually incur? Sadly, there is no straight answer to this. Business Today spoke to a few vendors present on these platforms. According to them, although the number of orders has increased, they did face inordinate delays in pick-ups and cancellations on Flipkart. They also alleged that Amazon's preference for certain sellers and the fee structure has increased the transaction cost substantially for them. A spokesperson of the All India Online Vendor's Association said, "There has to be rather proper accounting standards and disclosure norms for marketplaces so such speculative and manufactured reporting stops".