India’s e-commerce market heavily dependent on festive season sales
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Bengaluru: India’s online retail market is a lot more dependent on discount-driven festive season sales compared with the US and China, two of the biggest e-commerce markets in the world.
According to RedSeer Consulting, some 6.6% of all e-commerce gross sales in 2016 were generated in just five days in October. These five days are when Flipkart held its annual shopping festival Big Billion Days and rival Amazon India ran a competing event called the Great Indian Festival. Both firms spent hundreds of crores of rupees on advertising and deep discounts during these sales.
In comparison, the Singles Day sale by China’s Alibaba Group accounted for 2.4% of the country’s e-commerce market in 2015 and Cyber Monday in the US accounted for 0.8% of that country’s e-commerce sales last year. Big Billion Days, which has become synonymous with festive season sales, was inspired partly by Singles Day and Cyber Monday.
The numbers indicate that while the festive season sales bring in millions of new users and drive higher sales, e-commerce firms in India are overly dependent on this period compared with their peers in the US and China.
It also indicates that Indian e-commerce companies will find it difficult to break even for a long time if their sales continue to be heavily concentrated on the festive season.