As India’s festive season begins, e-commerce companies such as Amazon and Walmart-owned Flipkart are making a splash in the virtual market, with expectations that records could break within weeks.
Any lingering concerns that rising inflation and interest rates will hit consumer confidence in Asia’s third-largest economy are quickly being dispelled.
RedSeer, a Bengaluru-based consultancy that monitors more than 100 platforms covering 90% of online sales, expects virtual shoppers to spend a record $11 billion in the month to mid-November ( 915.5 billion), equivalent to nearly 20% more than last year.
Amazon India has had its “best ever start” during the peak shopping period, with customer visits soaring in the first two days of India Festival 2023, said Manish Tiwary, country manager, Amazon India Set a record of 95 million visitors.
Arief Mohamad, vice president of Flipkart, said sales of electronic products, casual clothing and furniture have grown seven to ten times compared with pre-holiday sales.
Both retailers have hired more than 200,000 temporary workers to cope with the rush and added more than 300,000 new sellers, according to company officials.
“I don’t even have time for lunch because there are so many packages to be delivered,” said Ajay Singh, a delivery worker at a Flipkart delivery center in New Delhi’s busy market.
Singh said he works more than 12 hours a day and expects his income to double in the coming weeks.
change the way
Citing a report by market research firm Nielsen Media India, Amazon officials said more than 80% of urban consumers are expected to shop online this festive season, with half of the buyers willing to spend more than last year.
Changes in consumer behavior and increasing smartphone penetration have driven the growth of online purchases.
Manju Negi may be representative of many working women in India who have money to spend but little free time and no desire to ply the congested roads to and from bustling malls and markets.
“Who wants to go to a crowded market and spend hours buying products while paying for transportation when there are so many options available on online platforms,” said Negi, a public relations manager at a Delhi-based company. “Compared to last year, we plan to Spending more on holiday shopping.”
Negi has already purchased a washing machine and an air fryer online and said she is looking for home decorations ahead of India’s biggest festival of lights, Diwali, in November.
Delivery network
E-commerce companies are also expanding their footprint by offering delivery solutions to more customers living outside major metropolitan cities in India.
“The rapid rise of online businesses has created opportunities for many logistics companies and small sellers, creating jobs for millions of people,” said Ashwani Jakhar, chief executive of Prozo, a supply chain management company based in Gurgaon near Delhi.
Commenting on the sales in the first 48 hours of the festival, Amazon said in a statement that more than 80 per cent of its customers were from non-metro cities and sales by small sellers increased by 35 per cent compared to the same period last year.
A report released by the Reserve Bank of India last week showed that consumer confidence hit a four-year high in September amid stable inflation and improving employment conditions.
With consumer spending accounting for 60% of gross domestic product, this would support the Reserve Bank of India’s forecast of 6.5% economic growth in the year to March 31, 2024.
Mrigank Gutgutia, partner at RedSeer, expects the improving business and consumer sentiment to continue, leading to “better and more stable growth in e-commerce not just this festive season but in the years to come.”
According to government estimates, the e-commerce market is expected to expand to $350 billion (nearly Rs. 2,913.06 billion) by 2030 from $63 billion (nearly Rs. 5,243.5 billion) in 2023.
© Thomson Reuters 2023
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