E-commerce companies' gross merchandise value to touch $1.5-1.7 billion in Oct: RedSeer

Festive sales are expected to help e-commerce companies register transactions worth $1.5-1.7 billion in October, according to research firm RedSeer Consulting.

"With this festive season, we foresee a spring effect of targeted marketing and focus on quality customer segments. It is going to be a win-win situation for online shoppers and gross merchandise value (GMV) of e-commerce companies could touch $1.5-1.7 billion in October," RedSeer Consulting CEO Anil Kumar told PTI.

This year's cumulative sales is expected to be about $18-20 billion, he added.

"While this is not much higher than last year, but annualised GMV for e-commerce companies fell 5-10 per cent in the second quarter of 2016. When you look at that, this is about 8-10 per cent higher, which is good," Kumar said.

The three leading e-commerce players — Flipkart, Amazon and Snapdeal — have announced their festive sales.

While Flipkart and Snapdeal will offer deals across categories to consumers between October 2-6, Amazon.In will host its sale on October 1-5. Online marketplace ShopClues has also announced its Diwali sale — to be held between October 1-10.

According to analysts, this year's festive sales may be impacted by recent guidelines by DIPP that bar e-commerce players from doling out steep discounts.

"The discounts offered will be there, those that are offered by sellers and brands, just like it happens in the offline world. Also, there will be many exclusive offers that will help drive growth," he said.

The players have been investing significantly to ramp up delivery and logistics capabilities to meet the surge in demand during the festive season.

Both Snapdeal and Flipkart have said they would create about 10,000 temporary jobs each, especially in logistics and supply chain to meet the surge in demand.

According to data compiled by RedSeer, e-tailers saw blockbuster performance during the festive season sale days last year with GMV going up four times and daily transactions escalating three times vis-a-vis on a non-sale day.

There was a spike of 50 per cent in average order value (AOV) as online shoppers purchased more premium products, as per last year's data.

The success of last year's (October 2015) performance was based on heavy discounting and aggressive advertising, which lured many old and new customers to shop repeatedly and also drove them to purchase expensive products, Kumar said.

"With new directives from Department of Industrial Policy and Promotion (DIPP) capping total sales originating from a group company or one vendor at 25 per cent, this festive season e-tailers can get a winning edge by targeted marketing on chosen customer segments," he added.