Ecommerce Platforms Encounter Demand Fluctuations Post Festive Season Kickoff
Ecommerce platforms are currently exhibiting indications of a softening demand following the robust commencement of flagship festive season sales events initiated last week.
However, industry leaders, brand founders, and analysts remain optimistic about a potential resurgence in demand as the nation approaches the Diwali festival.
During the week commencing September 22, sales accounted for approximately 51% of the anticipated festive sales for this year, culminating in a gross merchandise value (GMV) of about ₹60,700 crore, as reported by ecommerce consultancy Datum Intelligence.
This figure represents a commendable 29% increase in the initial week of sales relative to the same timeframe last year.
It is noteworthy that nearly a third of total gross sales achieved during this period occurred on the inaugural day of the sales events, September 22. On this day, Amazon unveiled its Great Indian Festival sale for Prime members, while Flipkart initiated its The Big Billion Days event aimed at its loyalty program participants.
In contrast, online retail sales in India experienced a remarkable surge of 32-35% during the initial two days of festive sales. This uptick was aided by the implementation of reduced goods and services tax (GST) rates on various items, coupled with substantial discounts offered by ecommerce marketplaces, as reported by ET.
“Following the sales surge on Day 1, we observed a significant decline by Day 3, with sales dropping to almost 70% of that recorded on the first day,” commented Satish Meena, founder of Datum Intelligence.
“Thus, a slowdown transpired from Wednesday to Friday, predominantly due to the weekdays.”
This decline can be attributed to a buying spree on Day 1, with shoppers delaying their purchases until the rollout of GST rate cuts, which spurred an influx of orders as festive sales commenced.
Analysts have noted that ecommerce expenditure has been on a positive trajectory since March, following an extended period of stagnation.
“Demand peaks sharply during the initial two days and then slightly stabilizes. Nevertheless, it remains elevated compared to business-as-usual (BAU) levels. We anticipate this momentum to persist until Diwali,” stated Anurag Kedia, co-founder of personal care brand Pilgrim.
“There may be intermittent spikes, but the two significant days have now elapsed.”
Mirroring Kedia’s sentiments, the founder of fashion handbag and accessories brand Miraggio, Mohit Jain, acknowledged a minor tapering in demand compared to the initial two-day surge; however, he emphasized that overall figures remain robust, currently reflecting a 110% year-on-year growth.
Demand Dynamics and Promotions
A spokesperson for Flipkart asserted that consumer momentum has remained consistent beyond the initial burst, with both traffic and transaction levels on the platform sustaining high figures throughout the weekend.
To stimulate sales mid-week, when demand typically wanes, platforms have been emphasizing deals, particularly during evening hours when consumers are more inclined to shop. “In the initial two days, our growth was pegged at 25% compared to last year.
However, we noted a 20% decrease in growth on Thursday and Friday,” elaborated Santhosh Balasundaram, chief executive and founder of Shadow Etail, an ecommerce vendor on Amazon and Flipkart.
“Platforms were urging brands to feature their products in promotions during the weekdays to counteract the declining user traffic.”
As is customary each year, smartphones have dominated the categories in terms of GMV, capturing a 42% share. Additional contributors to the first-week sales included lifestyle (13%), appliances (12%), consumer electronics (10%), and homeware and furniture (10%), according to the data.
Fashion and lifestyle brand Zouk reported a fourfold increase compared to BAU, anticipating robust demand for its gifting assortment in the coming days. Meanwhile, the ethnic wear startup Suta is projecting a 40% year-on-year growth in festive sales.
“In a nation like India, where shopping activity is extremely concentrated during these days, we still see a substantial number of last-minute shoppers until Sunday, September 28,” noted co-founder Sujata Biswas.
While most consumers focused on purchasing appliances and electronics during the first week, analysts predict that segments such as apparel, lifestyle, beauty, personal care, and gifting will gain traction as Diwali approaches.
Source link: M.economictimes.com.
