E-shoppers load festive carts with affordable goods - Oraicity - Taaza khabre daily(Orai City)

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Monday, October 28, 2019

E-shoppers load festive carts with affordable goods

BENGALURU: The value of merchandise sold by Flipkart and Amazon during the recent month-long festival sales may have fallen short of analysts’ estimates, marginally, while the number of units sold were in line with industry expectations, according to multiple people aware of the specifics.The slight dip in this year’s projected gross value of sales from the crucial festive sale, which was spread across September and October, at India’s two largest online marketplaces is largely due to consumers’ preference for more affordable products dragging down order value in the midst of a general slowdown in consumer sentiment, said company executives who briefed ET on the matter. On an overall basis though both companies grew sales and units sold when compared to 2018.Flipkart and Amazon were expected to rake in a cumulative $5 billion (Rs 36,000 crore) in sales, or gross merchandise value (GMV), during the festival sale season as reported by ET. Non-metro Areas Drive SalesBoth ecommerce firms were aiming to clock a 30% increase in GMV compared to last year. GMV is overall sales clocked by an online marketplace and does not include discounts, returns, cancellations and cashbacks on products sold, and it is different from the revenue generated by a marketplace. People in the know, however, said, the two companies clocked 10-15% less in terms of overall GMV on the back of lower-priced items selling better this year.71798740 Further, customers from India’s non-metropolitan areas accounted for over two-thirds of the online festive sales, with low-priced items across fashion, home and electronics emerging as top categories, company executives said. Brands and logistics companies that ET spoke to concurred.While Flipkart missed sales targets by value for mobile phones, it did well in categories like large appliances, fashion, home, beauty and lifestyle, sources said.“On the other hand, Amazon India missed estimates on general merchandise and lifestyle, and did well on mobiles and new prime membership,” said a person cited above.Replying to ET’s queries on the matter, a representative for Flipkart said the company does not comment on “category specific metrics,” adding that the company “exceeded all customer metrics we measure ourselves against.”Amazon India said top categories included smartphones, consumer electronics, large appliances, fashion, grocery, and home & kitchen. 83% of customers who shopped were from small towns, the company said.Flipkart did not share sale numbers.Separately, Delhi based Snapdeal said its sales volumes were 52% higher this year fuelled largely by demand from non-metros.“Units shipped in October on average saw a 60% spike for all ecommerce companies,” said a logistics company founder.In the first leg of the six-day sale that ran from September 29 to October 2, Amazon and Flipkart clocked gross merchandise value estimated at $3 billion, or about Rs 21,380 crore, according to Redseer Consulting, missing analysts’ estimate of $3.7-3.8-billion.Analysts are of the view that bank partnerships, luring customers towards flat discounts as high as 10%, along with EMI plans, exclusive launches, private labels, and introduction of features like games and Hindi interface helped ecommerce firms overcome a challenging macro environment.Marketplaces track multiple targets internally to gauge sales including units sold, returns, total value of items sold, delivery time, cancellations, among others. And these vary for different categories.“For instance, for smartphones and large appliances the metric is largely order value and delivery time,” said one person directly aware of the matter.“For long-tail merchandise like home items, that metric is primarily units sold, selection, and return,” the person added RBC Capital Markets in a recent report said that in 2018, Amazon accounted for 30% of India’s ecommerce market, second to Walmart-owned Flipkart, which held 44%.

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