India’s festival season has unleashed a digital shopping frenzy. eCommerce giants like Amazon and Walmart’s Flipkart are gearing up for record-breaking weeks ahead.
Any concerns lingering about inflation and higher interest rates dampening the spirits of consumers in Asia’s third-largest economy are swiftly fading away.
According to RedSeer, a consultancy based in Bangalore that monitors over 100 platforms, encompassing 90% of online sales, virtual shoppers are projected to splurge a staggering $11 billion from now until mid-November. This estimate signifies a remarkable 20% increase compared to the previous year, painting a picture of enthusiastic online shoppers gearing up for a festive shopping spree.
Amazon India has kicked off its ‘Great Indian Festival 2023’ campaign with a bang, boasting a phenomenal start to the peak shopping season. Vice President Manish Tiwary revealed that the online retail giant experienced an unprecedented 95 million customer visits within the initial two days of the campaign, marking their “best-ever start” to this crucial shopping period.
Meanwhile, at Flipkart, the excitement is palpable as Vice President Arief Mohamad reported a remarkable surge in sales for electronic products, lifestyle garments, and furniture. These categories saw sales figures skyrocket, reaching seven to ten times higher than the pre-festival period.
To manage the overwhelming demand, both Amazon and Flipkart have ramped up their workforce significantly. They’ve collectively hired over 200,000 temporary workers and onboarded an impressive 300,000 new sellers, according to company representatives.
The hustle and bustle of the season is evident on the ground too. Ajay Singh, a delivery boy at a Flipkart delivery center in New Delhi, shared his hectic schedule. “I don’t have time even for lunch as there are so many packets to be delivered”, he said. Singh is currently working over 12 hours a day, expecting a considerable boost in his earnings over the next few weeks.
India Experiencing Changing Shopping Trends
Referring to a study conducted by market research firm Nielsen, Amazon officials revealed that a staggering 80% of urban consumers are anticipated to indulge in online shopping during this festival season. Moreover, half of these buyers expressed their willingness to increase their spending compared to the previous year.
This significant shift in the consumer behavior can be attributed to the widespread adoption of smartphones, which has further fueled the rise of online shopping.
Manju Negi, like many working women in India, embodies this trend. With money to spend but limited time to spare, she, along with countless others, prefers the convenience of online shopping over navigating congested roads to reach bustling malls and markets.
Manju Negi, a public relations manager with a company in Delhi, said, “Who would like to go to an overcrowded market and spend hours buying products while paying for transport, when there are so many options on online platforms”. “We plan to spend more on festival buying compared to last year”, she added.
She shared the happiness of already purchasing a washing machine and an air-fryer and looking to spend more on home decor items before Diwali in November.
Know the Plans Delivery Networks Have
eCommerce companies have strategically broadened their reach by providing delivery services to customers residing beyond India’s major cities.
This expansion has not only transformed the online business landscape but has also created numerous opportunities for logistics firms and small-scale sellers, leading to the generation of employment for millions, as highlighted by Ashwani Jakhar, CEO of Prozo, a supply-chain management company based in Gurgaon.
Amazon, reflecting on the initial 48 hours of festival sales, revealed that a remarkable 80% of their customers hailed from non-metro cities. Additionally, smaller sellers experienced a notable 35% surge in sales compared to the previous year.
Recent data from India’s central bank indicated a significant boost in consumer confidence, reaching a four-year high in September, owing to stabilizing inflation rates and improving employment conditions. As consumer spending constitutes 60% of the gross domestic product (GDP), this surge in confidence is expected to support the Reserve Bank of India’s forecast of a 6.5% economic growth in the fiscal year ending on March 31, 2024.
Mrigank Gutgutia, a partner at RedSeer, expressed optimism, foreseeing sustained improvement in business and consumer sentiment. This positive trend is anticipated to contribute to not only a successful festival season but also to the stable growth of eCommerce in the coming years.
According to government estimates, the eCommerce market is on track to expand significantly, projected to reach $350 billion by 2030, compared to an estimated $63 billion in 2023.