Sales of large appliances through e-commerce channels have doubled between 2015 and 2017 from $430 million to $900 million, according to a report by RedSeer Consulting
Bengaluru: With Flipkart and Amazon India preparing to outsell each other during ongoing festive season sale and maintain that momentum over the coming quarters, large appliances is set to become a $1-billion category this year, according to a new research report.
Sales of large appliances through e-commerce channels have doubled between 2015 and 2017 from $430 million to $900 million, according to a report by RedSeer Consulting. The category’s sales online are now expected to grow 33% year-on-year and reach $1.2 billion by the end of 2018, the report added.
“Traditionally, customers tend to hold off large goods purchases till Diwali. As e-commerce has grown in India, a lot of the spillover from this sentiment is leading to growth of large appliances especially during festive sales," RedSeer said in its report.
During the early days of e-commerce in India, companies struggled to sell large appliances. Multiple issues around supply chain, delivery and installation, combined with consumers generally shying away from buying large appliances online kept growth in check.
But over the years, through massive investments in supply chain and delivery, online firms have been able to steadily create better customer experience in the category, Redseer said.
Over the past two years, both Flipkart and Amazon have built out massive warehouses specifically for large appliances, as part of their broader strategy to focus on sales of appliances such as TVs, fridges and washing machines. Flipkart, for instance, told Mint in an interview last month that it expects a 2.5 times jump in sales of large appliances like television sets and refrigerators in October, compared with an average non-sale month.
According to RedSeer, the number of large appliance specific warehouses has been continuously growing every year during the festive period.
Within large appliances, television sales are expected to fetch over $160 million this year, more than double the $70 million it raked in last year and up from $19 million in 2015. TV sales are expected to account for 6% of overall festive gross merchandise value (GMV), or the value of goods sold on a platform.
Flipkart is aggressively pushing TV sets from brands such as Xiaomi, which has emerged as the fastest growing television brand on its platform. In recent weeks, Flipkart has also struck a partnership with Blaupunkt.
Smartphone sales, which account for the largest category on e-commerce today, will cross $1 billion in the next five days in India due to aggressive discounts and exclusive product launches on Flipkart and Amazon, a report from research firm Counterpoint said. The two e-commerce platforms will capture more than 90% share which is the biggest contribution ever in the Indian online smartphone market in October, the report added.
Flipkart’s Big Billion Days Sale and Amazon’s Great Indian Festival went live on 10 October. While the Big Billion Days Sale will go on till 14 October, Amazon’s sale will end on 15 October. The two biggest online retailers in the country are expected to collectively spend an estimated ₹ 400 crore on advertising to promote Diwali sales, a 10% increase from that of last year, Mint reported citing top media buyers.