But this year is particularly important as the world is reeling from the economic fallout caused by the coronavirus pandemic. Millions of Indian shoppers are still wary of venturing into brick-and-mortar stores, and Meena expects online sales to grow more than 34% to $ 6.5 billion this year.
“This is where consumers are actually in the spending mode,” he said, adding that sales of about a month period is expected to account for 18% of total online purchases in India for 2020. “That’s why every business wants to win the battle over the holiday period.”
The competitive advantage of Flipkart during the holiday season
Flipkart’s seasonal shopping event, Big Billion Days, started on Friday.
The company built its strategy on selling affordable goods to the huge number of middle- and lower-middle-class online shoppers in India’s smaller cities, according to Rajneesh Kumar, Flipkart’s senior vice president and chief corporate affairs officer.
“A significant number … of people in India are looking for good value for money,” Kumar said. “If you provide the right value and the right customer experience, you will win.”
Last year, the US company was ranked as India’s most trusted online retailer in an annual survey conducted by TRA. The market research firm reported that 10 times more respondents said they trusted Amazon than Flipkart, which came in second.
“Flipkart and Amazon are going head-to-head in the e-commerce wars, in terms of product offerings, initiatives to strengthen affordability and increase consumer confidence, and most importantly, their last-mile delivery initiatives.” , said Prabhu Ram, head of the Industry Intelligence Group at research firm CMR.
Forrester’s Meena agrees, noting that “no clear winner has emerged yet.”
But he added that when it comes to holiday sales, Flipkart has “an edge in the amount of money customers spend.”
This is because Flipkart dominates online fashion sales, Meena said, adding that the company has strong ties to smartphone brands to offer great discounts.
The importance of Diwali
Since then, they have worked to improve their supply chains, especially ahead of the holiday season.
Amazon opened a new warehouse in Bangalore this month to handle the peak in holiday orders and hired 100,000 seasonal workers, 10,000 more than last year. Flipkart said it hired 70,000 warehouse and delivery workers to run the ride, an increase of 20,000 people from 2019.
Both companies have also translated their platforms into multiple languages, which they say will help they reach more shoppers in smaller cities and rural areas.
“We’ve prepared very well for the holiday season,” said Minari Shah, Amazon India’s director of public relations. Amazon’s Great Indian Festival kicks off on Saturday, but members of its Prime membership program get access to the offers a day earlier.
Like Flipkart, Amazon declined to talk about past or anticipated holiday sales figures, but Shah noted that “without a doubt, [the holiday season is] a very important part of our calendar “.
Like retail events in the US, Black Friday, and Cyber Monday, India’s online shoppers upload virtual carts in advance while they wait for sales to begin. Retailers typically offer deals on fashion, smartphones, and consumer electronics, as well as holiday items like candles, lights, and other decorations.
“Since I need to buy a couple of gadgets, I feel I can wait a couple of weeks before the sale starts and get a better deal,” said Anshul Arzare, a banker living in Mumbai.
Arzare said it has seen a spike in online shopping since the start of the pandemic. In his apartment complex, “there is a designated area for delivery guys, and at any moment you can see an Amazon boy with 20 packages.”
The pro said he prefers to use Amazon.
“The experience has been pretty good and I inherently have more confidence in Amazon’s product delivery than in Flipkart,” he said.
Jio is not a big threat, for now
“While quite fledgling, JioMart is ambitious and, with a cocktail of attractive discounts and cashback offers, will seek to appeal to online shoppers,” said Ram, of CMR.
JioMart did not respond to a request for comment for this story. For now, it only offers online groceries, leaving Flipkart and Amazon to duel over deals on smartphones, consumer electronics, clothing and household items.
But JioMart plans to enter the fray soon.
“In addition to grocery, we will be expanding JioMart to cover electronics, fashion, pharmaceuticals and healthcare in the coming days,” Ambani said at Reliance Industries’ annual meeting in July.
Flipkart said it welcomes more competition.
India’s growing e-commerce industry “requires so much investment on the ground to build the supply chain,” Kumar said. “More players are good because more and more will be invested to build that supply chain.”
Whether it’s Flipkart, JioMart or some other ecommerce player, Shah said Amazon tries not to get caught up in what rivals are doing.
“We watch them, but we are always more focused and obsessed with our customers than the competition,” he said.
Competition will only intensify. According to an August report from consulting firm McKinsey, e-commerce sales represent only 5% of the total gross value of goods in India.
But now, due to the pandemic, “India’s digital economy is about to take off,” Ram said, adding that companies are also gathering new consumers as rural parts of the country go online.
“Some of the trends we see this year will be here to stay,” he said. “I don’t see a return to how we were.”