Online retailers in India sold products worth $3 billion in the six-day festive sale that ended last week, rising at an impressive 30% since last year, according to research firm RedSeer. The pick, huh? A year ago, the growth rate was 93%.
Even the biggest festive season in India, featuring dazzling promotional blitzkrieg and strong discounts from Amazon India and Walmart’s Flipkart, has not spared the pressure of slowing down the economy.
Forrester expected online retailers in India to produce about $4.8 billion in sales between September 25 and October 29. Satish Meena, a research firm analyst, said about 80 percent of these forecast sales—$3.84 billion — are expected to occur between September 29 and October 4.
For Amazon India, which has invested more than $5.5 billion in the country, RedSeer’s findings are more troublesome. According to the research firm’s report, Flipkart — together with its own e-commerce firms Jabong and Myntra — promoted 63% of the market share during the holiday season. Amazon India has settled with only 22 percent of the population.
The Amazon spokesperson in India declined to comment on the results, but expressed concern about the way RedSeer conducts its surveys. The spokesperson said these “speculative studies… lack of comprehensive and reliable methodology.”
Amazon India did not share its internal results, but agreed to quote 190,000 customers in 50 cities from a Nielsen survey.
According Nielsen, Amazon controlled 51 percent of all transactions during the festive sales, 42 percent of all orders, and 45 percent of all “value.” The spokesman added that “this event is our biggest celebration ever.” The company received orders from 99.4 percent of postal codes in India and saw more than 65,000 vendors from 500 cities participating.
“From small towns came more than 88 percent of new customers,” the spokesman said.
Flipkart did not respond to a request for comment. Many in India have been watching e-commerce sales as a check to see if they could kick-start slowing consumer spending in the country.
Sales, leading up to the Hindu Diwali Festival, have historically been a time of extravagant and thoughtless consumption in India.
And for Amazon and Walmart, there was a lot going on this festive season. The first half of this year was sluggish for Amazon and Flipkart in India, Meena said.
Earlier this year, e-commerce companies experienced dramatic shifts in local e-commerce regulation, both of which pushed hundreds of thousands of products out of their markets overnight.
U.S. At last week’s conference Secretary of Commerce Wilbur Ross expressed concern over some of India’s recent regulatory changes, saying that India has become one of the most protectionist nations in the world. Indian newspaper The Economic Times claimed last week that Amazon had cut investment in its Indian company by a quarter this year. Citing the study, Ross said that disruptive policy changes have an impact on the way global giants perceive the Indian market.
Yet divisive initiatives are just one cause of concern for global giants. The economy of India has slowed to a six-year low. Forrester’s Meena said last week’s sales were a moment when both Amazon and Flipkart could have bounced back.
But even as the growth rate slowed, Meena said the fact that both these businesses, along with other online retailers, are able to generate so much in revenue is good news for them.
“The year 2019 has been a sluggish year for e-commerce,” TechCrunch said in an interview. “But two things are clear. One is that there is still a great opportunity for e-commerce in India. Second, customers in smaller cities and towns are growing their digital purchases. “Meanwhile, neither Amazon and Flipkart have made it clear that they share no significant internal data. Flipkart said that “2X sales growth” had been posted on its market.
The company said it had seen “3X transaction growth” and electronics grew over “70% from tier 2+ cities.” Amazon said “fashion grew 5X” and beauty items saw “7X” jump in sales.
The companies have never published accurate figures, so it is impossible to understand how this development should be measured.