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E-commerce Businesses Cautiously Optimistic for Upcoming Festive Season
Experts are of the opinion that for the upcoming festive season, the scale of e-commerce sale will depend on how much consumers decide to trade-off on what they are going to buy – whether they are still buying the basic stuff or exploring other categories along with it
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Not everyone is staying at home now because of the fear of Covid-19. With the festive season around the corner, the biggest market places in Kolkata are seeing a huge flock of people. The major transition of buyers towards e-commerce platforms due to the closing of retail business during the lockdown is being juxtaposed by the retail business regaining momentum since the process of unlocking started.
Consequently, the growth of e-commerce may not be as high as expected. For instance, in several reports like Redseer report, e-commerce gross merchandising volume is expected to hit 7 billion dollars in this year’s upcoming festive season compared to 3.8 billion dollars last year. This is supposed to happen against the backdrop of the country’s GDP declining by 23.9 per cent with severe job losses, salary cuts and delays happening.
“People are not going to spend tonnes of money this year compared to last year given the pandemic challenges,” says Rajat Wahi, Partner, Deloitte India. He added, “Some level of shopping is going to come back because of festive season but given the backdrop of job losses, it will be conservative. Manufacturers are cautiously optimistic about the upcoming festive season.”
E-commerce Firms Are Going All In
Arguably, consumers’ pent up demand for fashion, electronic accessories could finally be met during this festive season, which will be corroborated with aggressive discount pricing from e-commerce companies. E-commerce firm Snapdeal’s sale for the festive season has been themed ‘Kum Mein Dum’. The company says it ‘will enable users to buy more for less’.
Walmart-owned Flipkart is partnering with a greater number of brands this year compared to last year. Flipkart’s Big Billion Day sale, which will be for six days from midnight of October 16, is said to showcase 200 plus special edition products. For the sale period, Flipkart has partnered with financial services platform Paytm to offer payment solutions and cashback offers. Amazon’s Great Indian Festival Sale starting from October 17 is showcasing 900 new product launches. Over one lakh local shops and kiranas have been supported by Amazon to serve during this festive season. E-commerce companies are not leaving any stones unturned to leverage this festive opportunity as much as possible.
Several industry experts believe that the smartphone segment specifically, is going to be a frontrunner for this festive season sale. One report suggests that India will sell nearly 127 Mn smartphones this year which is 22 per cent less than the projected figure of 162 Mn. However, with the festive season approaching, the industry is likely to see better days. B2B e-commerce marketplace Eolstocks with over 200 active customers and 20-30 lakh worth of transactions stated that smartphone production is ramping up and the sales have begun. The Eolstocks spokesperson said, “We feel there will be a major shift in demand from high priced phones to lower priced ones. The premium segment is not going to be impacted though, because their spending power has not been affected and the spending capacity continues to remain pretty much the same.”
Wahi pointed out that it also depends on how much people are going to tradeoff – keep buying the basic stuff or buying from other categories. Hence, a lot of variables are involved that will eventually decide what this year’s e-commerce business will look like. Only time will reveal what decisions consumers have made. In any case, the festive season presents a good chance for the country’s economy to make a significant recovery.