Apart from usual suspects - Flipkart and Amazon India - Paytm Mall, Snapdeal and ShopClues will also enter the battleground this year.
It is advantage customer, as India's biggest online retailers vie with each other to offer the largest spread of goods, the most exclusive offers, deep discounts and cashbacks aimed at snagging the winner's trophy at the e-commerce grand slam -the annual festival sales -that began on Wednesday, and they are estimated to garner cumulative sales of Rs 15,000 crore in the coming weeks, according to industry analysts.
Market leader Flipkart has tasked executives with registering a lead of “70-30“ over rival Amazon India, while the American online retailer has promised to fight with the force of “two Amazons“ from last year setting the stage for an epic battle that will also draw in new entrant, Alibaba-backed Paytm Mall, as well as Snapdeal and ShopClues.
“Our CEO (Kalyan Krishnamurthy) has told us nothing less than a 70-30 (lead over Amazon) will do,“ said Smrithi Ravichandran, senior director at Flipkart, which aims to triple gross sales from its five-day sale to $1.5 billion. In 2016, Flipkart had captured 43% of the e-commerce market during the festive sales according to RedSeer Consulting, while Amazon India was able to snag about 32%.
The online festive sales -now a dominant feature of ecommerce growth in India since Flipkart first launched its Big Billion Day Sale in 2014 -are not just markers for industry leadership but also stoke growth for allied industries from logistics to digital payment providers.
Payments industry executives expect total sales generated by the ecommerce industry in the next few weeks, starting with Flipkart's Big Billion Days (BBD) and Amazon India's Great Indian Festival, to be at least 50% more than last year. “It could reach Rs 15,000 crore,“ said MN Srinivasu, director of payment company BillDesk.
Logistics companies have also expanded their network to help online retailers reach more pincodes. “We have added 7,000 pincodes in the last six months and are trying to be in locations where we expect demand,“ said TA Krishnan, CEO of logistics company Ecom Express, which works with various ecommerce players.
Total industry shipments per day during the peak sale season is estimated to be 5 million, a steep jump from the 3-million shipments last year, according to Krishnan. Flipkart, which is expecting 12-lakh shipments per day during the BBD sale and for several days after, will work with approximately 40-45 logistics partners apart from its in-house logistics arm Ekart, according to an industry executive.
Both Flipkart and Amazon are also looking to speed up deliveries and reduce delivery time by at least a day. Analysts from Forrester and RedSeer estimate the main sale days for Flipkart and Amazon India could deliver gross sales of $1.5-1.7 billion.
The competition is also expected to be more intense, as the festive season marks the first big industry battle after Flipkart snagged a massive funding of nearly $4 billion including from Japan's SoftBank.
Online retailers are also testing the large scale impact of demonetisation and the introduction of the Goods and Services Tax on e-commerce industry. However, the expansion of the consumer base with significant additions of new shoppers from small towns and cities is expected to deliver a welcome boost.
“The barometer of our success is our reach to new customers and getting new customers online is our top most priority at this point in time,“ said Manish Tiwary, VP of category management at Amazon India, adding that non-metros were the driver of new user growth for the company, with the share of new customers in non-metros moving past 80% in 2017.
This is also the first major online sale after the launch of mobile data provider Jio. The impact of Reliance Jio will lead to many first-time shoppers - which could lead to a nearly 50% year-on-year growth in unique shoppers during festive days, according to consultancy RedSeer. “The number of core online shoppers, who shop regularly across multiple categories, would increase by 15-20% over the existing 25-30 million last year,“ said Arvind Singhal, chairman of retail consultancy Technopak.
The newest entrant in the e-commerce market, Paytm Mall is also leaving no stone unturned in an attempt to capitalise on the upcoming festive season. The platform, which is starting its four-day sales on the same day as Flipkart and Amazon India, is spending $35 million on its logistics network with a claim that over 50-60% of all orders placed during the sale will be delivered the same or next day.
“We're betting on an online-to-offline (O2O) delivery model where a majority of our orders are being serviced by the nearest brand-authorised store, large retail chain or small shopkeeper,“ said Amit Sinha, COO, Paytm Mall.