No slowdown in online consumer spending in India, say Amazon and Flipkart

Amazon and Walmart, rivals in the US and many other parts of the world, are on the same page in shrugging off slowdown blues in India. 

In the run-up to its festive sale, Seattle-based Amazon has said there is no slowdown in online consumer spending in India. Flipkart, majority owned by Walmart and Amazon India’s biggest competition, is also bullish on the country’s e-commerce segment, ruling out any sign of a downturn as it prepares for Big Billion Day. 

This, after industry experts pointed at a dip in online buying. According to a report by consultancy firm Kantar, the number of online buyers has dropped across several key categories in the first half of 2019. 

Mobile phones and fashion — the two largest categories in e-commerce — have shown the biggest decline, the report has shown. Although considered recession-proof, the online average ticket size has fallen 27 per cent in the first six months of the year, compared to the same period last year. Average spending is down 21 per cent in the first half, according to the Kantar study. 

Amazon.in, however, said as far as its marketplace is concerned, there was no slowdown. Sellers, who are the first to notice any signs of a slowdown, are looking forward to the festive season, it pointed out. “These are the people who pick up slowdown signs the first. Even if you look at what’s happening in the last two months, for Diwali — the number of new sellers who are registering and the selection they are getting — there’s no lack of confidence from the seller side. The belief is this Diwali will be much bigger and better than the last one,” said Manish Tiwary, vice-president, category management, Amazon India. He added that new customer acquisition continued to be “extremely robust”, helped by the launch of Amazon in Hindi.  Tiwary reiterated that as far as Amazon.in was concerned, there’s no slowdown.

At Flipkart, the mood is equally upbeat. Well into the last-minute planning for BBD—its annual festival sale — success seems to be the overwhelming theme at its Bengaluru office. Sources in the know told Business Standard that when slowdown doubts were raised at a Flipkart townhall meeting a few days ago, CEO Kalyan Krishnamurthy expressed confidence that this year the company's 'Big Billion Day' would do well despite the noise around softening demand or slowdown. 

Responding to a specific query, Adarsh Menon, Vice President and head-private labels, electronics and furniture at Flipkart, said, ‘’we are not seeing a slowdown.’’

According to Amazon, its advertising strategy hasn’t changed much this year, compared to a year ago. While announcing on Monday that its Great Indian Festival would start on the midnight of September 29 and go on till the end of October 4, Amazon India said customers would loosen their purse strings as the festive season approaches. Flipkart’s Big Billion Day sale would also begin the same day. 

Besides cashback offers, the company also flagged off the AmazonFestiveYatra and house-on-wheels concept.

The house-on-wheels, set up on three trucks, will visit 13 cities covering over 6,000 km throughout the festive season. 

The upcoming festive sale is a litmus test to find out whether slowdown has hit e-commerce or not. The numbers, which will roll in after the festivities are over, will tell the real story, analysts pointed out.