Indian retailers have declared an all-out shopping-and-sale extravaganza this week ahead of the Diwali festive season, with e-tailers leading the charge.
That it won’t be a festive season of bonhomie and good cheer has been obvious over the last few weeks as large e-tailers have stepped up their advertising, each determined to grab a bigger share of sales, which are estimated to increase by at least 20 percent during Diwali. Some e-tailers say it’s not unreasonable to expect 100 percent growth.
Industry analysts said this festive season is going to be indicative of the overall growth in retail, and perhaps the most heated race for customers seen in the Indian market so far.
It is also expected to offer fewer discounts than last year, and better technology from e-tailers.
Although Diwali is a little later this year — in November — the festive rush already has begun, largely dictated by e-tailers who wanted to get an early start, as well as stretch the shopping season.
The Boston Consulting Group and Retailers Association of India published a report titled, “Retail 2020: Retrospect, Reinvent, Rewrite,” highlighting that India’s retail market is expected to nearly double to $1 trillion by 2020 from $600 billion in 2015, driven by income growth, urbanization and attitudinal shifts. They also estimate the e-commerce market will grow from $3.5 billion in 2014 to $100 billion by 2020.
Last year, Flipkart’s Big Billion Day sale, on Oct. 6, was fraught with technology glitches, problems in delivery, unavailability of items, and other problems, and customers were furious with the e-tailer. This year, the Big Billion Days stretch over five days – from Oct. 13 to Oct. 17. The company said 1.6 million people have already downloaded their app — the sale is on an app-only format.
Myntra, the fashion e-tailer Flipkart acquired in May, is also a part of the sale this time.
“India shops the most during this time of the year,” said Mukesh Bansal, Flipkart’s head of commerce platform and chairman of Myntra. “We have sold one million units already and expect to do a higher number by the end of today’s fashion sale,” he said. Around six million people visited the site and the portal saw 25 items being sold per second, according to company officials.
Bengaluru, Chennai and Delhi have emerged as the main cities where visitors were located, and Ludhiana, Lucknow and Bhopal from non-metro cities, according to Flipkart officials.
Several e-tailers explain it is more auspicious to buy during certain periods or festivals. In the world of fashion, apparel and shoes, this is more so, especially at Diwali time.
And the season is expected to be a battle between two of the country’s largest e-tailers. Amazon India has been preparing for the five days of sale time at the same time as Flipkart, with its Great India Festive sale. Amazon India has lined up more than 25,000 sellers — the e-tailer also follows a marketplace model in India, in which it connects buyers and sellers since foreign direct investment in the e-commerce space are not allowed by the Indian government.
The company has also tripled its warehousing capacity to 5 million cubic feet since last year.
The apparel segment has been growing fast. “Ethnic wear sales go up hugely at this time. We have done other things in preparation, like launching our crafts store with 3,500 items across categories,” said Mayank Shivam, category leader of Amazon Fashion.
It is also apparently a time when the market is testing apps. While Amazon is not limiting itself to an app-only sale, it will have special app-only deals on Friday and Saturday.
Snapdeal, another top e-tailer, chose to do an electronics-only sale on Monday. Company officials said the sale helped increase revenue by 17 times.
Brick-and-mortar retailers are not being left behind. While some retailers claim that more than 40 percent of the year’s sales happen during the festive season, others estimate it at closer to half that amount.
“We’re ready for it all to step up,” said Benu Sehgal, vice president, head of DLF Place, Saket. She believes that the window of festive season shopping is much wider than it appears at first. “The festive season really is from Aug. 15 to Jan. 26. Sales go up across categories, because people are in the mood to spend.”
In Select City Walk mall in Saket, which already has high sales and equally high footfall, the opening of H&M’s first store is expected to boost revenues, as well as lift neighboring malls. Sales at the store were estimated to be about 17.5 million rupees, or $270,100 at current exchange, on the first weekend that H&M opened on Oct. 3, according to a business paper.
As Vinita Sharma, a banker and an intrepid shopper said, “All of this, and we still have a long time to go for Diwali. I’m not complaining about discounts…”
