Amazon India bets on new customers from smaller cities, big brands for festive success

E-commerce major Amazon is confident of clocking strong growth this festive season in India, driven by availability of large selection of products and big brands as well as new customers coming onto its platform, especially from tier II and III towns.

Amazon India, which competes head-on with rival Flipkart, will kick off its festive sale from October 10-15, lining up new launches across various categories and dishing out discount offers to woo Indian shoppers. Walmart-backed Flipkart will host its 'The Big Billion Days' (TBBD) festive sale from October 10-14.

"Each festive sale (Great Indian Festival) has been bigger than the previous one. We feel confident because we have new customers coming in. More than 70 per cent of new customers are expected to come from tier II and III towns," Amazon India Vice President (Category Management) Manish Tiwary told PTI.

He added that big brands like OnePlus, Xiaomi and Samsung across categories like mobile phones, large appliances and others are also lining up their products during the festive sale.

The company doesn't share country-specific details on number of customers and revenue.

Asked about the segments that would drive growth, Tiwary said every category is expected to do well with many of them witnessing 10X growth.

"We expect mobile phones, fashion and large appliances categories to do really well," he added.

Tiwary pointed out that the company is also lining up finance options, including EMI on debit cards and Amazon Pay wallet, to ease purchases through its platform.

Amazon India has also set up a festive home showcase, where it is displaying more than 1,600 of the over 170 million products available on its platform.

About 20 million people are expected to shop on various e-commerce platforms during the festive sale next month, translating into sales of around USD 3 billion for players like Amazon and Flipkart, according to a report by research firm RedSeer.

Smaller player ShopClues, too, has announced its sale from October 10-November 7 to offer up to 80 per cent discount across fashion and lifestyle, home, kitchen, electronics and accessories categories.

According to the RedSeer report, the share of items like electronics and furniture during the sale could be higher this year due to affordability initiatives being undertaken by the e-commerce players. Mobile phones currently account for a lion's share of sales on the two leading e-commerce platforms.

Like in offline retail, e-commerce companies see a significant jump in sales during Dussehra and Diwali. The September-November period typically generates a majority of the annual sales of these companies, which prepare months in advance for the sale event.

The festive sale not only brings in discounts and deals for customers but is also an annual showdown of sorts between the two largest players -- Flipkart and Amazon India. The competition between Flipkart and US-based Amazon this year is expected to be even fiercer as both companies have invested significantly through the year to ramp up product offerings as well as logistics infrastructure to ensure speedier delivery.

While Flipkart now has the backing of US retail giant Walmart (via a USD 16 billion deal signed earlier this year), Amazon India too has received funding through the year from the US parent across operations like marketplace and payments.