Small town shoppers drive first leg of festival season sales

Sangeetha Chengappa Bengaluru | Updated on October 18, 2020 Published on October 18, 2020

Shoppers from Tier 2 cities and beyond have driven this year’s annual festive season sales that kicked off with Flipkart’s Big Billion Days on Friday and Amazon’s Great Indian Festival sale on Saturday.

A whopping 91 per cent of new customers, 66 per cent of new Prime membership sign-ups and 66 per cent of sellers on Amazon came from small towns, shopping in five Indian languages including Hindi, Tamil, Telugu, Malayalam and Kannada. “Customers from small towns have grown from 60-70 per cent last year to 91 per cent and over 1.1 lakh sellers received orders from over 98.4 per cent of India’s pincodes in just 48 hours, making it Bharat’s biggest celebration on Amazon ever. We are humbled to see sellers, brands and ecosystem partners nationwide coming together during these unprecedented times to spread joy across the country” Manish Tiwary, Vice President, Amazon India told BusinessLine.

Prime member sign-ups during Prime early access were from Tier 2 & 3 cities such as Tawang, Changlang, Mokokchung, Baran, Pudukkottai, Una and Jaunpur. And 66 per cent of sellers who received orders on Amazon were from Tier 2 & 3 cities including Yadgir in Karnataka, Virudhunagar in Tamil Nadu and Lakhisarai in Bihar, said Tiwary.

In the run up to the festive season (September 1 - October 14), Flipkart saw more than 36 million new app downloads by customers pan India and majority of these downloads happened from smaller cities such as Ranchi, Medinipur, Cuttack, Guwahati, Darbhanga. While cities such as Bengaluru, New Delhi, Mumbai, Hyderabad and Kolkata continue to lead the pack, Tier 3 + cities made up for almost 60 per cent of the demand this year. Customers from new cities including Jhumri Telaiya (Jharkhand), Chamba (Himachal Pradesh), Cumbum (Andhra Pradesh), Thottiyam (Tamil Nadu) have shopped during BBD, Flipkart said in a note. Over 3 lakh sellers, of which 60 per cent are from Tier 2 and beyond have sold to 250 million customers pan India, fuelled by affordability and value purchases.

While Flipkart claims that 70+ sellers became crorepatis and 10,000 became lakhpatis; Amazon claims that 5,000 sellers clocked sales worth Rs 10 lakh in the SMB pre-festive lead up and first 48 hours of the Great Indian Festival.

As customers continue to trade down across categories due to Covid-19, average customer spend is estimated to drop by 13 per cent during the festive season sale. “The average GMV per shopper this year is likely to be $82, a 13 per cent drop vs last year’s spend of $94. However, the drop in per shopper spend will be more than offset by millions of new shoppers this year – over 45 million, an increase of 70 per cent over last year” Mrigank Gutgutia, Director at RedSeer had told BusinessLine on Friday. “Considering the net effect of steep rise in number of shoppers and the decline in per shopper online spend, overall e-commerce GMV during the first event of festive season will grow almost 50 per cent YoY to touch $4 billion” he said.

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Published on October 18, 2020
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