Post Diwali snapshot of few leading Indian Online Retailers

diwali-ecommerceWe are still trying to understand if India has a seasonal or festival led eCommerce market. A majority believe that it’s actually not, and say that sales happens throughout the year, but see significant spike during the festive season. For instance, we recently had the festival of Diwali, which is among the most important festivals for Indians, that sees a lot of buyer activity happening. Undoubtedly it is the peak sales time for both online and offline retailers when the number of consumer purchases sees a sharp rise.

Since this period has a significant contribution in the yearly revenues of the retailers, it becomes important for many to analyze, understand and learn about how to manage their business during such an exciting time of the year.

Here at Iamwire, we tried to collaborate how these players played their game during this festive season. We also made an attempt to understand how actually is India shopping – in terms of geography, contribution of mobile, the key strategies to tackle the festive led Indian online shopping market and similar observations.

Let’s have a look at the eCommerce players’ Diwali report-card

CCavenues’ recently launched eCommerce marketplace, Dhamaal.com, witnessed an overall increase in sales by 20 – 25%.  There were however a few categories in which the portal saw an increase in sales by 40%.

Without sharing any numbers, Snapdeal says that it got ‘a very high double digit increase in the sales.’ Fashion and lifestyle retailer Myntra also witnessed significant uplifts in its sales.

While as compared to last year, Infibeam witnessed 3 times more traction, ”We are hopeful that this number will improve further as festival season in India has just started. The percentage increase was close to 200% when compared to last year,” said Manu Midha, Infibeam.

Fashionandyou experienced a double digit MOM growth this festive season.

”Diwali is always the best time for sales in the year, especially for ethnic focused web-stores like Craftsvilla.com and we usually see 50% more in sales than other months of the year on average,” said Manoj, co-founder, Craftsvilla.

Female consumers focused marketplace, Ladyblush saw growth trajectory of 25-30% MoM; though during last month it grew at 60% MoM. Junglee.com witnessed a 150% YoT growth in customers visiting the site, and a 235% growth in product pages viewed by customers.

Utsav Fashion, which is focused on online exports, witnessed that its sales were about 5% higher than the previous month. “In domestic market we witnessed about 20% increase in visits over the previous month but only a marginal increase in sales,” said Pradeep Chopra, Utsav Fashion.

Top performing category

The popular or say the top performing categories varied for all the retailers we talked with.

Affiliated marketplace, Shopclues.com witnessed more purchases happening in electronics, mobile, lifestyle and home décor products along with other categories. Dhamaal.com saw beauty, fragrance, jewellery, cookware & gift products as toppers.

Precious jewellery saw maximum uptake in sales for fashion for Snapdeal. Myntra’s top performing categories remained similar for the festive time as well, as it’s in other times of the year i.e. footwear and apparel; however it also saw a lot of uptake in ethnic wear and accessories segments.

For Infibeam, mobile and books were leaders in overall sales. Home décor, traditional Indian ethnic wear, fusion wear and festive giftables, were top performing for Fashionandyou.

For the recently launched Amazon’s Indian marketplace, besides consumer electronics and books, it saw increased spending across Home and Kitchen products, watches, fashion jewellery, baby products as well as Toys.

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Electronic items like mobile, laptops, tablets, cameras, TVs, etc. along with home décor, fashion, and toys were most sold on eBay; while Diwali gifting items like Diwali diyas, pooja thalis and rangolis along with Diwali sweets and gift items were top performing for Craftsvilla. Apart from this, traditional sarees and jewellery also did well for it. Ladyblush saw a good traction for traditional clothing.

Let’s see who actually shops more

In terms of geography, Myntra’s customer base is spread over Tier 1, Tier 2 and Tier 3 cities, whereas for Ladyblush 65% of its orders come from non top 10 cities, for it South India & North East are the top 2 geographic regions. For Dhamaal Tier 1 and 2 cities contributed about 60% of the transactions.

Fashionandyou’s 60% of the sales come from Tier 1 and the balance 40% from Tier 2 & Tier 3.

For Craftsvilla, about 25% customers are from outside of India, while Junglee’s 80% of the traffic comes from top 6 metro cities in the country, however demand from Tier 2 towns such as Chandigarh, Ahmadabad, Pune and Bhopal is rapidly growing (200% year-over-year growth) for it. For Shopclues too Tier 1 and 2 cities performed well.

While the top six metros remain the biggest spenders, there has been a substantial jump from Tier 2 and Tier 3 cities for Amazon India.

Is shopping now really a mobile game?

With the growing number of people owning smartphones, mCommerce is also going to be a major contributor for sales for these eCommerce companies in the coming time. While for now, mobile contribution remains between 10-20% for maximum of these companies. Few of the companies like Flipkart, Snapdeal, Amazon have recently launched their mobile apps and have seen a good contribution of mobile in the overall sales.

“eBay India is a believer in the potential of Mobile Commerce and has launched a suite of solutions for the variety of mobile devices used by Indians. The aim is to get customers to reach for their phone before they reach for their wallet to ensure they have checked online for the best selection & great deals. Today, over 23% of our sales take place through mobiles,” said Deepa Thomas, eBay.

“Sales through mobile have been growing steadily and after the launch of our new Android and iOS Apps we have witnessed a 100% increase in revenue through Mobile, said Amit Maheshwari, VP-Marketing at Snapdeal.com.

For Dhamaal, Fashionandyou 10% of the total traffic comes from Mobile, whereas Mobile contributes close to 15% of our overall sales for Myntra, 40% of the overall sales for Infibeam are from mobile phones.  While Junglee and Craftsvilla witnessed quite a less purchase happening from mobiles i.e. 9% and 2% respectively, but both the companies believe that mobile is a growing channel for purchase. “Junglee.com has seen a 57% growth in customers surfing via mobile devices since last Diwali,” said, Mahendra Nerurkar, General Manager, Junglee.com.

Which day witnessed the highest sales?

“Needless to say there has been a spike during the festive season, especially the week of October 22nd  onwards right through till Diwali,  keeping in line with the festive and shopping mood of consumers.  But we believe the convenience of shopping online anytime and from anywhere coupled with wide selection at low prices is what is leading to a greater adoption for online shopping. This is steadily growing and  will  not be limited to just festive seasons,” said Amit Agarwal, VP and Country Manager, Amazon India.

Peak days for sales varied for all the retailers, “The festive season started with Onam in the South followed by Dussehra / Navratri and continued all the way till Diwali. Hence, our demand was excellent during this entire period, said Vikas Ahuja, CMO, Myntra. Flipkart’s highest spike this season was during its cyber sale (15-19 Oct).

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Infibeam witnessed high sales a week before Diwali, starting from 24th October till 1st November, but 29th October was the day which witnessed maximum sales for the company.

For Snapdeal 27th October had highest sales for fashion. While for Fashionandyou mid October brought in high sales and for eBay Dhanteras brought high purchases. For Craftsvilla the biggest sale happened on Oct 29 and Oct 30, whereas for Ladyblush entire last week into Diwali witnessed maximum sales. Junglee.com saw the largest spike in traffic during the Diwali period on 29th of October.  Whereas, 2 days prior to Diwali brought high sales for Dhamaal.

Old Vs New

Internet penetration has brought in a number of shoppers online not only because of the convenience it offers but also a wide collection of products that can be looked into online which is definitely a cumbersome task when someone goes to physical stores. Apart from this, marketing, branding etc. done by these retailers also helped them reach a new section of customers, thus helps them to capitalize on not only the existing customers but new ones too.

Here is quick table of old Vs new customers for the eCommerce players this season

Is COD still a clear winner when it comes to payments?

There has been a shift in the modes of payments used by people now, with time people have started feeling comfortable for paying online, or say retailers are now able to make people trust them for the same.

For eBay India electronic mode of payments like credit cards, debit cards, net banking, mobile payments & cash cards were the popular modes of payment this festive season too like the rest of the year and for Dhamaal.com too, Netbanking & CC are the most preferred modes of payment.  “Credit card is the preferred mode of payment used on LadyBlush.com; though we observed percentage of cash on delivery orders go up during Diwali period (15th Oct to 3rd Nov),” said Rahul Sethi, Ladyblush.

Amazon saw no substantial increase in Cash on Delivery as a payment mode and mentioned that customers were happy to pay online.

While for Snapdeal COD is most popular mode of payment followed by prepaid and EMI, and for Myntra and Fashionandyou 65% and 60% of the payment are COD respectively.

While Craftsvilla.com does not have Cash on Delivery so 100% payments are prepaid credit card or net banking for them.

Managing delivery remains a biggest challenge

Even if these companies are able to gain traction on their platforms, reach their targets, but there are few challenges which these stores face while managing the entire process.  While talking with a number of eTailers, we found that a number of these retailers find it difficult to manage in-time delivery during period like this and thus many even came up with different mechanisms to manage the same. Like Shopclues tried bringing changes in the warehouse by dividing the packaged products on the basis of occasion so as to meet the delivery deadline as sorted products makes it easier for the people to plan the delivery for instance products for Dhanteras need to be shipped before the ones for Dhanteras, as explained by Radhika Aggarwal, Co-founder, Shopclues.com.

Fashionandyou also sees order fulfillment in time & in full is the key business challenge, as its business model doesn’t work on inventory stocking, as said by Aasheesh Mediratta, CEO, Fashionandyou.com. Multiple POS/In time delivery & in field logistics team along with great amount of education & involvement with the vendor is helping the cause, he added.

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“Delivery to specific Tier 2 city pincodes & meeting last minute orders,” pointed Hanif Sama, COO, Dhamaal.com on challenges faced by the company during this festive season.

Similar is for Craftsvilla and Ladyblush which follows a marketplace model, where they don’t have physical ownership and control of the products. “During peak periods like Diwali, lot of stress gets built up in the ecosystem (suppliers, logistics) which can cause delays,” said Rahul Sethi.

Let’s have a glance at the key marketing strategies taken up by these retailers

Dhamaal used mailers as a major means of communication to its customers; Myntra remained active on digital media to make consumers aware of its offerings.

Fashionandyou launched a number of campaigns during the entire period, which included Power of 9 promotion during Navratras, it also ran a Diwali promotion, whereby it gave Sony DVD home theaters daily, iPhone 5 every week & a Diwali jackpot of Nakshatra Diamond necklace to the month’s top shopper. To get more of sales the company even extended free shipping above the purchase of INR 1500.

eBay launched a ‘eBay Happy Go Crazy Diwali Sale’ which offered multiple deals across popular categories.

While Yebhi, offered ‘Diwali Bonanza’, in which it gave INR1000 off on purchases above Rupees 2199 and also presented ‘Festive Fashion’ reductions of upto 50% and extra 30% off on orders above INR 1999.

Junglee.com launched a dedicated section for Diwali Deals, offering consumers a single platform where they can find deals on popular products they want to buy this festive season. Whereas Amazon’s guaranteed delivery in two days which attracted a lot of attention.

Iamwire says:

All in all the passing season was a rollercoaster ride for the popular eCommerce players in India. Although one can attribute the shopping frenzy to festivals like Diwali, Dhanteras and Eid, but it has to be taken into account that all these players work on individual strategies to further lure customers into buying.

Special festive discounts keep customers happy, and happy customers in turn boost retail sales. So even though one may say that online stores have some or the other sale going on throughout the year, during festive season these sales/discounts are more heavy and well-highlighted to match the spirit of the customers.

Even though for eCommerce we can still pick out the leading categories i.e. travel bookings, online ticketing, recharges, books, electronics, apparels etc., but for eTail separately, we can’t exactly say which one sector came out as a winner, since clearly there were good sales across a number of categories in different sites.

But one thing is to be noticed, even though we have many marketplaces selling across various channels – apparel, shoes, electronics, books, home appliances and so on, the customers are choosy when it comes to picking which stores they need to buy separate items from, since different marketplaces saw rise in sales in different categories.

Considering this positive seasonal boost must be something eTailers look for every year, it will be interesting to see what strategy they devise for the upcoming Christmas-New Year festive period.

For suggestions and sharing your views, email pooja.sareen@wirefootindia.com

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  • priya chokra

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  • DJ

    Nice Ecommerce chat, though it gives a strange very local domestic view of the subsidized Indian Ecommerce market. Objectively Indian Ecommerce is stagnating, the world is booming. Majority of Indian Shoppers by in Dubai and the US. Amazon is selling world wide more than 400 orders per second. In Germany more than 50 orders per second.

    India has 50 Million very rich, 350 Million well financially based inhabitants. How many shop abroad ? The total sales should be above 100 orders per second, it means 267 Million orders per month. Companies like Flipkart reach a penetration of 0.2% with 30000 orders per day. Fashionyou does not reach 0.05%. So when do people acknowledge the truth ?

    It is about what and how you sell, Amazon is picking up in India every day. Indian Retailing needs substantial international, long term injection, in brain, technology, investment and leadership. Then there will be also a game change for local Ecommerce brands, otherwise they probably just are a waste of money with “hope” for a take over.

    Important is to face the domestic truth and global competition.

    DJ

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