New users, small towns drive first day of sale for Flipkart, Snapdeal

Topics Flipkart | Amazon | Snapdeal

Flipkart is expecting that the business of MSMEs would bounce back this festive season with sellers from tier-2 and beyond seeing growth in e-commerce
Flipkart witnessed 50 per cent new customers emerging from tier-3 cities and towns for shopping across categories during the first day of the e-commerce giant's flagship ‘Big Billion Days’ (BBD) festive sale which started on Friday. According to the early indicators from the first day of the week-long BBD event, Flipkart is also seeing a huge demand for its products and services from metros and tier-2 cities.

“This festive season, Flipkart focuses on its commitment to driving value for customers, and progress and growth for sellers, MSMEs (micro, small and medium enterprises) and artisans,” said the company. “The early indicators from the first day of BBD  show how India is increasingly adopting digitisation,” it said.

The Walmart-owned firm is locked in a fierce e-commerce battle with US rival Amazon, which is hosting a month-long festive sale ‘Great Indian Festival’ starting on Saturday.

The BBD, this year, is bringing offers each hour from thousands of sellers and thousands of brands across categories.
Bengaluru-based Flipkart said the home category saw a surge in 53 per cent of new customers. Large appliances plus BGM (beauty and general merchandise) each witnessed a near 50 per cent increase in new customers. All of them came from tier-3 cities.

Flipkart is expecting that the business of MSMEs would bounce back this festive season with sellers from tier-2 and beyond seeing growth in e-commerce. On the first day of BBD, local MSMEs from over 2,550 pin codes saw demand coming in from across the country. Sellers from 167 new cities joined e-commerce this BBD.

About 60 per cent of sellers are based in tier-2 cities and beyond including small cities such as Talcher, Velur and Sohagpur. Top-performing tier 2 Seller cities include Jaipur, Surat and Panipat sellers.

Flipkart said there has been a perceptible shift towards 'Digital India' with a 75 per cent increase in prepaid transactions. This showcased a strong endorsement for digital payments as consumers continue to maintain social distancing when making purchases.

The (equated monthly instalment (EMI) options served as a good trigger to keep the festive spirit buoyant during this BBD. One out of every 5 purchases in high-ticket segments like mobiles, furniture, large appliances and electronics were driven through an EMI construct.

Reflecting the increasing depth of e-commerce in India, users from more than 3,417 towns and cities across India made purchases on the first day of e-commerce firm Snapdeal’s “Kum Mein Dum” Sale. Nearly 30 per cent of the total orders on Day 1 were from first-time users. Consistent with Snapdeal’s positioning towards users in non-metro cities, nearly 90 per cent of orders were from Tier-2 and Tier-3 towns.

Populous tier-2 and tier-3 cities like Nagpur, Vijayawada, Bhopal, Chandigarh, Ranchi, Patna and Guwahati continued to drive orders on Snapdeal. Smaller cities like Sagar (Madhya Pradesh), Raniganj (West Bengal), Gurdaspur (Punjab) and Una (Gujarat) also clocked impressive order volumes. The demand has exceeded last year’s festive volumes on the very first day of Snapdeal’s sale.

“Our early analysis shows that users have shown a marked preference for buying everyday use products by utilising deals and additional discounts to maximise value for their purchases,” said Snapadeal Spokesperson. “There is also a strong demand for products for festive celebrations at home,” he said.

Ahead of the sale, New Delhi-based Snapdeal added 1300 new pin codes to go deeper into Bharat. These were areas which were previously unserviceable or where users were compelled to travel to nearby towns to collect their orders. According to pre-festive projections, orders have now started to flow in from these rural areas. These include small villages like Palasner in Maharashtra, Abdasa in Gujarat, Kalsi in Uttarakhand, Chitkul in Himachal and Chidambaram in Tamil Nadu.

The Covid-19 pandemic has accelerated the shift to e-commerce, as an increasing number of consumers are shopping online with greater frequency.

The upcoming festive sales are expected to push up the annual gross merchandise value (GMV) of e-commerce companies to around $38 billion, a growth of 40 per cent from the previous year, according to a report by research firm RedSeer Consulting. The e-commerce festive sales could alone cross the $7-billion mark.

Analysts said the huge growth of e-commerce is driven by consumers in tier-2 and tier-3 towns. Besides, the surge in demand is due to Covid-19, the increasing focus on regional markets and the rising adoption of smartphones is driving growth from tier-2 and beyond, according to Unicommerce, an e-commerce-focused software-as-a-service platform. Tier-3 towns and beyond have showcased the growth of over 90 per cent, almost double the growth recorded in the Unicommerce annual report released in August.


Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel