E-commerce firms like Flipkart and Amazon, which earlier saw around 68 percent of their GMV via sales of mobile phones and electronics, are now witnessing growth in sales of large appliances such as refrigerators, washing machines, air-conditioners, etc. According to GMV data sourced from market research firm RedSeer Consulting, the GMV from sale of large appliances grew 100 percent to 9100 crore in 2018, compared with 4550 crore in the previous year.
Analysts attribute this to investments made in supply chain, better after sale services and wider availability of products. e-tailers and third partly logistics players are setting up warehouses and fulfillment centres, expanding delivery network and hiring manpower to cater to a large set of shoppers. With more brand tie-ups on e-tailing platforms and in-house private labels increasing affordability, the segment is bound to see a rise in shoppers, according to RedSeer analysis.
Recently, in an interview to FE, Gopal Pillai, director and GM, Seller Services at Amazon India, said the company is spending multi million dollars on fulfillment centres. Amazon has 50 such centres in the country. Pillai asserted that these investments are ‘long-term seeds’.
Flipkart’s big billion days, which coincided with the festival season, accounted for 40 percent of key Indian brands’ total annual sales, Satish Meena, senior forecast analyst at Forrester Research, said in a blog earlier this year. Large appliances formed a major chunk of both Amazon and Flipkart’s festive season sales this year.
“We are a price-sensitive market, constantly on the lookout for best deals available, and e-commerce companies are able to provide discounts and add-on services like free installation; financing options – cash back, debit-credit card offers, EMI; extended warranties and exchange offers, with relative ease compared to traditional stores. We are already starting to witnesses many companies taking an online-first approach and showing great results. From the current 10 percent share of online sales to total sales of consumer durable, this will likely to increase 3-4x in the next couple of years,” said Ankur Pahwa, partner and national leader, e-commerce and consumer internet, at Ernst & Young.
With ever-evolving customer needs and preferences, e-commerce retail supply chains have also evolved in the process, KPMG said in a report in May. One major development in product categories that was witnessed in recent years is large-size shipments. Recent trends have shown an increase in large-size shipment categories like big appliances and furniture. E-retailers are focusing on growth in large shipments.―The Financial Express