Reverse-migration pushes e-commerce festive sales to Tier 2, 3 cities

India’s top two e-tailers witnessed a surge of new shoppers from smaller cities in the first two days of festive sales, on the back of discounts, reverse migration of metro customers and credit products.

Walmart-backed Flipkart and Amazon India have both seen sales more than double in the first 48 hours compared to the 2019 festive sale edition.

Flipkart’s Big Billion Days (BBD) sale started on 16 October, while Amazon’s Great Indian Festive (GIF) Sale started for Prime members on the same day and was opened for all the next day.

For Amazon, 91% of its new customer base came from Tier 2 cities and beyond while Flipkart witnessed almost 65% of its new customer base from smaller towns and cities.

Amazon claimed this was its best first 48-hours festive sale ever in India, with over 1.1 lakh sellers on its platform already receiving orders.

Smartphones, consumer electronics and large appliances continued to be the biggest selling categories in terms of gross merchandise value (GMV) for Amazon, while fashion and consumables were big in volumes.

“The first 48 hours have surpassed the expectations we set this year and engagement on our platform is spiking. With orders coming from over 98.4% of pin-codes in just 48 hours, it will definitely make this year’s sale our biggest in the history of Amazon.in,” Manish Tiwary, vice-president, Amazon India, said in an interview.

Categories such as tablets are witnessing a 300% increase in sales, premium smartphone launches have gained traction even in smaller cities, compared to previous GIF sales, Tiwary added.

Rival Flipkart witnessed a 40% jump in smartphone sales and 50% increase in people availing product exchanges over 2019 BBD. Large screen televisions, laptops, IT accessories witnessed an increase of 1.4x from last year.’

Flipkart said more than 3 lakh sellers are participating in the ongoing sale, of which 60% are from Tier 2 cities and beyond. The e-commerce major has expanded its seller base reach by 20% to cater to more than 3000 pin codes this year. It has also seen 36 million new app downloads in the run-up to the festive sale​.

In just two days of BBD, sellers on Flipkart witnessed sales growth that they saw in the first six days of its 2019 sale.

“Many metro customers have shifted to Tier 2 hometowns bringing their online shopping habit with them. As people who lived in rental housing in metros give up houses and live in their hometowns, their disposable income has gone up due to less spending. Much of this is being funnelled to online shopping. We see attractive offers especially on the various affordability constructs, which is driving further acceleration,” said Mrigank Gutgutia, director, e-commerce, Redseer.

Amazon, through partners, has already disbursed nearly 600 crore of credit to its customers in the first 48 hours of its sale while Flipkart saw a 65% increase in customers availing EMIs to buy mobiles, laptops and white goods. More than 25% of appliances and electronics are being purchased on EMIs during the festive sale, Flipkart said.

Flipkart-owned Myntra in its ongoing festive sale has seen 100% growth in purchases over last year, with more than 2 million customers having shopped so far, during the two days of sale period. The fashion marketplace has seen 50% of demand coming from Tier 2 and 3 towns.

Tier 2 and 3 users are engaging in Hindi and other South Indian languages like Tamil, Telugu and Kannada, with 70% of EMI requests coming from this region for home appliances like AC and refrigerators, Amazon’s Tiwary added.

Over 9 million visitors used the vernacular interface to avail the “new essentials” which included mobiles, apparel and electronics during this sale, Flipkart said.-Live Mint

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