From Gangtok to Gir, Flipkart and Amazon festive sales traverse India

Most of the e-commerce growth this year is driven by consumers in smaller towns
Ongmula Bhuttia is a resident of Ranipool, a small suburban town located near Gangtok, in the mountainous state of Sikkim. She recently made her first purchase using an e-commerce platform by shopping a set of bedsheets during Flipkart’s festive Big Billion Days (BBD) sale. Bhuttia now plans to buy mobile phones and clothes during another upcoming sale. The products were brought to her by Doma Tamang, who is one of the growing numbers of women kirana delivery partners in the region. Tamang delivers e-commerce orders in the hills of Gangtok apart from handling her own store. She delivers the products by foot since the region is not motorable.

Bhuttia is among millions of new customers from small towns and remote locations in the country who are shopping products ranging from grocery to fashion and electronics for the first time on Flipkart, Amazon and Snapdeal during their flagship festive sales.

The coronavirus pandemic has accelerated the shift to e-commerce, with an increasing number of consumers shopping online at a higher frequency. Most of the e-commerce growth this year is driven by consumers in smaller towns. The rising adoption of smartphones is also driving growth in small towns and cities.

This has helped e-commerce firms witness blockbuster festive season sales. According to consulting firm RedSeer, the first week of festive sale (October 15-21) saw a 55 per cent year-on-year sales growth with $4.1 billion (Rs 29,000 crore) worth of goods sold across platforms compared to $2.7 billion last year.

The biggest growth lever this year was the massive addition of shoppers. The total shoppers during the first week jumped from 28 million last year to 52 million this year (an 85 per cent year-on-year growth), according to RedSeer. Over 55 per cent of the shoppers were from small cities. The total festive sales of e-commerce firms are expected to cross $7 billion.

Ankur Pahwa, partner and national leader, e-commerce and consumer internet at EY India, said e-commerce firms have been betting big on smaller cities and beyond to drive growth. “They are increasingly witnessing these bets paying dividends, and generating billions in sales,” he said.

He added that big players in the online space have invested heavily in addressing challenges to bring smaller cities and towns into the digital fold — such as fulfilment, language barriers, logistics, generating demand and curated product portfolios.

“We are only scratching the surface of what Bharat is capable of with increased investment in the space,” he said. “Bharat is bound to take centre stage in this growth story.”

Indeed, of the 666 million visits Flipkart received in the five days of BBD, 52 per cent of customers came from tier-3 cities (those with populations from 20,000 to 50,000) and beyond.

Further, BBD saw the emergence of small businesses from smaller towns. Within the 35 per cent new seller base this BBD, around 60 per cent of the sellers were from tier-2 cities (those with populations from 50,000 to 100,000) and beyond.

“The philosophy of the company is to democratise e-commerce,” said Kalyan Krishnamurthy, chief executive officer of Flipkart Group. “If the tier-2 and tier-3 users in India want to buy the latest Nike shoes, we would have that selection for them.”

In the first five days of BBD, Flipkart had already delivered 10 million shipments with over 3.5 million delivered by its kirana partners (compared to 1 million deliveries last BBD). These shipments happened across categories such as mobiles, fashion, electronics and home furnishing. The platform witnessed 110 order placements per second.

These deliveries were made across the country — ranging from the Indo-Pak border in Gujarat to 5,000 feet above sea level in Siliguri, and through the jungles of Gir.

It also included Flipkart delivering a washing machine to Firoz Shaikh’s residence in the small town of Wardha after travelling a distance of over 85 km through the jungles of Bor Tiger Reserve in Maharashtra.

In Eastern India, a makeshift wooden bridge connects the residents of a small village of Golgram to the nearest city. While the region beyond the bridge has a retail presence, an increasing number of customers from this small village are fulfilling their requirements of large appliances from Flipkart. Flipkart’s delivery staff travel 50-60 km one way from the Kharagpur hub to Golgram. They then cross the wooden bridge carrying large appliances such as washing machines and refrigerators.

E-commerce giant Amazon has also witnessed the biggest ever opening for sellers and brand partners during its flagship festive sale, the Great Indian Festival. About 91 per cent of new customers came from smaller cities. Users experienced shopping in various vernacular languages like Hindi, Tamil, Telugu, Malayalam and Kannada.

Over 110,000 sellers received an order on Amazon. About 66 per cent of sellers who received orders were from tier-2 and 3 cities such as Yadgir in Karnataka, Virudhunagar in Tamil Nadu and Lakhisarai in Bihar.

Amazon India has set up a programme, Amazon Easy, which is an assisted shopping service for customers who are currently not shopping online. The challenges for them include transaction barriers like lack of trust, access to internet, unavailability of payment instruments or an inherent apprehension of using technology.

Amazon has tied up with local entrepreneurs to set up and manage Amazon Easy stores. Here customers can walk in for assistance with buying on Amazon. The programme is changing the way India buys by enabling a completely new segment of customers to experience shopping online for the first time.

“It was very difficult to shop from any online site. But Amazon Easy store shopping is more convenient to me,” said Vishal Kumar, an Amazon customer based in Ladhewali, a village in Punjab.

Amazon works with several network partners across India like Vakrangee, Indiabuys and Velocity to bring the Amazon Easy experience to new-to-e-commerce customers. The firm appoints associates and trains store owners to help customers find and buy products of their choice. “We see Amazon Easy playing an important role in enabling the next 200-300 million customers to enjoy shopping on Amazon,” said Kishore Thota, director, customer experience and marketing, Amazon India.

For Snapdeal, nearly 70 per cent of orders were received by sellers located beyond the top five metropolitan cities during the e-commerce firm’s recent festive sale. There was a steady flow of orders to sellers in smaller centres like Avinashi in Tamil Nadu for textiles, Palitana in Gujarat for footwear and Rewa in Madhya Pradesh for gaming accessories. The other such places included Muktsar in Punjab for herbal products and Birlapur in West Bengal for home decor products.

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