Festivals are a massive business opportunity in India, and like every year, e-commerce companies went all out to milk it this time too. Almost every company has its own version of these annual flagship sales. Some call it ‘End of Reason’, some call it a ‘Great Indian Festival’ but they all aim to go for the ‘Big Billions’.
Flipkart's annual flagship event “Big Billion Days” this year registered a whopping 666 million visits. 110 orders were placed per second during the 5-day sale.
Flipkart and Amazon have sold goods worth nearly $4.1 billion ( ₹29,000 crores) in the first week of festive season sales, compared to $2.7 billion in 2019 (51% growth). Customers from Tier III cities drove the sale this year with nearly 50 percent demand coming from these areas (reverse migration effect)
Flipkart delivered 1 crore shipments and guess what 1/3rd of total shipments were delivered by Kirana partners. Also, this year 60 percent of the sellers were from Tier II and Tier III towns.
From Flipkart's take-off (and crash) to finally soaring high
For Flipkart, 2014 was a year of several game-changing firsts. In May that year, the e-commerce company made its first significant acquisition with its $330 million purchase of online fashion retailer Myntra.
Two months later, Flipkart set a domestic fundraising record by securing $1 billion in a single investment round. And in October 2014, it debuted its flagship Big Billion Days (BBD) sales, introducing shoppers in India to the global concept of mega festive season sales online.
For all the hype around BBD, though, the website crashed, orders got canceled, and products went out of stock—all within the first few hours of the one-day sale. It was a public relations disaster and the co-founders Sachin Bansal (then the CEO) and Binny Bansal (then the COO) had to apologize to their customers. It was an underestimation of the demand.
Fast forward 7 years and today BBD is one of the most recalled and well-known sale events in the retail category.
Fun Fact: Around 10 am on 6th Oct 2014, as several curious shoppers tried making their first BBD purchases, Tatkal bookings for railway tickets opened up, choking up payment gateways!
This year, Flipkart grabbed 68% GMV (Gross Merchandise Value) share and the number of shoppers jumped from 28 million last year to 52 million this year.
30 Minutes Of Singles Day Sale > 6 Days Of Festive Sale in India
Singles Day, which takes place every November 11th, is a holiday created by the Chinese e-commerce company Alibaba in 2009 to celebrate those who are single in a similar way to how Valentine's Day celebrates couples. However, the event has become the world's biggest online sales event with total sales exceeding Black Friday, Cyber Monday and Big Billion Day, and Prime day combined
Fun Fact: November 11 represents a bare stick (11.11) or uncoupled individual
The main American competitor for Singles Day is post-Thanksgiving Black Friday, known for snaking queues and dangerous stampedes
Singles’ Day shopping starts between China’s Golden Week (early October) and Chinese New Year (early February), filling an otherwise slow spell for retailers, while Black Friday and digital-era companion Cyber Monday signal the kickoff of winter holiday shopping in the U.S.
But there is a difference. Singles’ Day features more limited-edition luxury items, with less emphasis on steep discounts. It has evolved into one of the biggest gifting occasions in China.
Going by the statistics, there’s little contest: Singles’ Day sales surged past America’s Black Friday and Cyber Monday in 2012 and only expanded from there.
In 2019, shoppers spent $7.4bn during Black Friday and an additional $9.4bn on Cyber Monday but even when combined, these numbers come nowhere close to the $38bn spent during Alibaba's Singles' Day.
Also, Alibaba beat Amazon's estimated Prime Day sales just within an hour of the sale and generated an estimated $13 billion.
Quick Fact- Singles Day 2019: Sales hit $1 billion in just over a minute. And $10 billion in the first 30 mins.
Alibaba lengthened the shopping period to 11 days this year to allow consumers more time to browse and grab deals while easing pressure on the logistics infrastructure, therefore creating a better shopping experience. Alibaba booked record-breaking $74.1 billion sales for 2020 and the event ended Wednesday at midnight.
Like Alibaba, JD.com and Pinduoduo also host similar campaigns each year. JD.com’s sales crossed $23 billion last year and $41B this year. This model has also been replicated by Qoo10 in Singapore and 11th Street in South Korea.
Where does this head for Indian e-tailers?
India’s retail market, which is worth $850 billion, is the 4th largest globally. The online retail’s penetration is ~3.4 % currently (~$30B)
India will have 300-350 million online shoppers by 2025 from 100-110 million in 2020. This will also lead to nearly 30 % CAGR of gross merchandise value of the e-retail market, which is led by Amazon, Flipkart, Snapdeal, others, from $30 billion in FY20 to $100-120 billion by FY25 — around 4X growth
So while it appears that China has heavily surpassed other countries’ in milking the festive e-commerce melas, it is only a matter of a decade or two before the big billion days (and the likes) become the biggest billion days.
Undoubtedly, the next 250 million Indian internet users are a mouth-watering prospect for all parties involved. These festive sales allow e-tailers to get a foot in the door.
So there is a promise. One important question to ask is who foots the bill and for how long. But then again, as a caution for customers, it is worthwhile to remember, “If it looks too good to be true, it is too good to be true”. Reportedly, 16% of products on Amazon and 6% of products on Flipkart were costlier during the festive sale! The e-tailers might not just be throwing these parties, they are having their cake and are eating it too. Let us know what you think!
This article is co-contributed by Karan