COVID-19 impact: Online festive sales expected to be a different affair

All the major e-commerce firms might witness major sales performance

flipkart

The forthcoming festival sales could be a different affair for various e-commerce firms due to the COVID-19 pandemic. It is expected that all the major e-commerce firms will witness a major sales performance with the overall segment reaching $ 38 billion sales in the Calendar Year (CY-2020) as per the firm RedSeer.

Festival sales is one of the most significant times of the year for e-commerce firms when they witness the maximum sales figures and they try to capitalise on the same during this time. Experts say that most of the e-commerce firms make up for the whole year's revenue out of the festival sale.

E-commerce marketplaces usually hold up to three sales leading to the festival of Diwali. The first of these sales is usually the largest and usually accounts for more than 60 percent of the sales during the festive period. Amazon holds its ‘Great Indian Festival’ and Flipkart holds its ‘Big Billion Day Sale’ as the first wave of festive sale in the country every festive season. There are also reports that online E commerce players and logistics services providers have increased hiring of blue collar temporary workers to capitalise the demand during the upcoming festive season. Experts at RedSeer point out that driven by a massive shopper growth, the festive sales for the first sale event will grow by 50 percent y-o-y over CY 19 to reach $4 billion.

A recent report by RedSeer indicates that in CY20, the festive sales will remain equally important- however it will be a festival of firsts for different reasons. The recent times have seen massive online adoption by customers driven by the massive spurt in online e commerce sales plus there has been a rise of new shopping models owing to changing customer demographic including video-based and WhatsApp-based shopping which will be the new addition to the festive landscape this year.

The report observes that this festival sales will also see strong nationalist sentiments coupled with the government’s Atmanirbhar policy, which is expected to impact the brand mix in categories such as electronics and mobiles. The report further points out that though there will be some recovery as far as organised retail is concerned it may not fully recover by the festive period and some of the share will go to online platforms. It is also expected that the Rise of Jio is likely to impact the festive sales momentum, though given their limited exposure to electronics, the impact is likely to be moderate. This festive season will see maximum shoppers from Tier II cities driven by the Bharat and democratization themes due to the COVID-19 pandemic.

The online fashion category is expected to see good traction this festive season especially due to its relatively slow recovery rates post the lockdown coupled with activities and social gatherings increasing thereby pushing their demand significantly. Additionally categories such as home furnishings are expected to do better than ever before due to the high demand for WFH and study from home environment. Interestingly there is an observation that categories such as mobiles and appliances will remain strong but not as large as previous years as demand for these verticals has been somewhat satiated with category specific sales post lockdown.

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