Online Diwali sales a big hit! E-tailers set to reach GMV of $1.2bn

E-tailers in India are expected to have shipped 35-40 million products within a period of six days during this festive season

India’s e-commerce industry is likely to hit between $1-1.2 billion in gross merchandise value (GMV) during the week-long festive sales that end today.

E-tailers in India are expected to have shipped 35-40 million products to customers, the highest ever witnessed in a six day period, according to researcher RedSeer Consulting. Yesterday, Amazon announced that it alone had shipped over 15 million products during its Great Indian Festival sale this year.

“Customers, both regular shoppers and first-timers, have come online to shop in millions. As a result of this bumper sales performance, we see the industry being on track to deliver the single biggest month for Indian e-tailing sector ever, in October 2016,” said Anil Kumar, CEO at RedSeer Consulting, in a statement.

For the month of October the total GMV that the e-tailers could hit would be in the range of $1.7-1.9 billion adds Kumar, hoping that this puts the industry on the track of achieving an annualised GMV run rate of $20-23 billion. While sales do usually drop in the months after Diwali, experts say they usually provide a benchmark for the upcoming year.

The strong performance from the sector came nearly six months after registering a subdued growth with the sale of online products falling by 19 per cent in the Jan-Mar quarter, followed by a further reduction of 5-10 per cent in the next quarter of this financial year. Experts see a boost in sales due to demand from smaller towns  in the post-monsoon period.

Amazon said that 70 per cent of all its new customers during the Diwali sale were from Tier II and lower towns, signifying an increased outreach of e-commerce in the country. Country head, Amit Agarwal, said that he was extremely enthusiastic about the future of e-commerce in India given the deep penetration the company saw this year.

While Amazon made a big splurge this season, pushing its paid loyalty subscription service-Prime-onto buyers (of whom there are estimated to be 1.6 million during the five day sale), experts say Flipkart continued to lead the pack. “Flipkart has done extremely well along with Myntra and Jabong. The continue to lead the pack,” said an industry watcher who pleaded anonymity.

One of the biggest shifts the sector saw during the sales, however, was the increased shift towards the three major e-tailers- Flipkart, Snapdeal and Amazon. The six day sale period increased the retailers' share in the GMV, which before that sale ranged bettwen 75-80 per cent. This share was increased to 90 percent at present owing to the big discounts, better experience and larger inventories.