Amazon, Flipkart lure customers with sale events

Online marketplaces are launching a slew of initiatives to test consumer appetite as the devastating second wave of the Covid-19 pandemic ebbs across the country.While Flipkart announced its Big Saving Days across categories on Sunday, Amazon India will kickstart a sales event next month, people aware of the matter said.As India records a sharp drop in new infections and larger states begin to relax lockdown guidelines that came into effect in the final week of April, e-tailers are exploring options for a steady recovery in all segments, including those regarded as non-essential.Flipkart is also incentivising sellers to help shake off the lockdown inertia and activate listings and slots. In a note to merchants, the online marketplace stated it would bear the full cost of shipping—across all categories, except online grocery—when a new customer places an order in June. “This will help you acquire new customers and thereby assist your business growth,” Flipkart said in the note that was sent to sellers last week. ET reviewed a copy of the communication.Amazon India—which is running selective sale events in certain segments for now—is sounding out sellers for sale events due next month and is preparing internally as well, sources said. “Some of the measures like shipping incentives are tools to create demand on the seller side and not just the consumer side. It has to work both ways,” said a source. 83523482Steady revival in businessThe person said that while “confidence is gradually coming back, it will be a slow process and not an immediate jump like last year”.Representatives for Amazon India and Flipkart declined to comment.Multiple online merchants told ET that they are seeing a steady revival in business as lockdown rules are loosened across India’s major states. While average selling price, or ASP, has come down in certain segments like fashion, both small and large merchants said they are seeing a recovery but will wait to see how demand holds up, going forward.The cautious optimism is mostly due to the broader and deeper impact of the pandemic across metros and non-metros compared to the first wave in 2020. Last year, after the first spread of infections had abated, ecommerce companies did not just recover but had surpassed pre-pandemic-level sales by July.Online retailers recorded an estimated 120-140% sales growth, clocking 20-40% higher sales than in January of that year. Industry watchers attribute this largely to the impact of the pandemic having been less severe in 2020, spurring consumers to come back and shop online. This year, even if lockdowns are lifted, there is still a sense of uncertainty—both in terms of health and personal finance.For Amazon, which had to postpone its flagship event Prime Day in India even as it is being held later this month globally, the sale planned next month will be its first major event post the virulent second wave."For them (Amazon), Delhi is nearly back to pre-second wave of sales. Mumbai is recovering while Bengaluru has opened up from Monday. The recovery differs from state to state this time. Right now, the focus is on the July sale event," said a second source.Amazon's India country head Amit Agarwal told ET last week that the company is seeing customers coming back to the site as they browse for products across categories.Greater comfort with shopping online has pushed daily shipment numbers to over 5.5 million daily. Nearly a month back, this number was hovering at 4-4.5 million. Logistics firms are also counting on the fact that people may still avoid offline stores and malls for some time.These are positive indicators for e-commerce even as offline retail continues to be affected with no noticeable recovery in sight.Seller CentralMultiple sellers who spoke to ET on the developments concurred with the estimates of industry executives. One of the largest sellers on Flipkart said the recovery has been strong and that his business is clocking higher order volumes over the last one week compared with sales in January."This is also happening because I have added categories like mosquito nets and such home-related products which are doing well. Last year, everyone shifted to making masks. So, you have to adapt to these changes based on demand," the Delhi-based seller said. Another merchant who sells electronics and accessories on his own, besides supplying it for private brands of e-tailers, said he has witnessed a similar recovery as well. "I am selling more on Amazon but the trend is encouraging for now. They have to solve the shipping issue which is still taking longer in some cases," this person said.Sellers are of the view that e-commerce platforms are keen to stage a recovery well ahead of the festive season. "As things stand now, there is no plan to postpone or cancel (festive season sales). Much of it will depend on if there is a third wave and its seriousness," said the seller, who is also working with Amazon’s accelerator team that looks at private brands.Last year, e-tailers clocked record gross sales of more than $8 billion during the festive month of October and November surpassing initial estimates of $7 billion by consulting firm RedSeer. During the five-day Diwali sale event, Flipkart, Amazon India and other platforms clocked nearly $4 billion in gross sales, 50% higher than in 2019.These numbers indicate the importance of the flagship Diwali sales for e-tailers in India and why they would want to hold it unless it becomes unviable due to the pandemic."Things are changing quite fast but as of today it's too early to call it (festive sales) off. If the current theme of recovery lasts and no major external factor brings disruption, we should be able to hold the festive sales," an e-commerce executive said.

from Economic Times https://bit.ly/35npzDm
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