India: Flipkart, Amazon see surge in orders as tech infra holds up

Photo: Mint

Flipkart and Amazon India saw a surge in traffic and orders, driven by deep discounts on electronics, apparel and other products during the five-day sale held by the two online retailers last week. Crucially, the technology infrastructure of the two firms coped much better with the surge in traffic, unlike last year, as the sale was spread over five days.

India’s largest e-commerce firm Flipkart Ltd reported more than $300 million in value of goods sold over five days last week. It was a reprise of last year’s day-long Big Billion Day sale. The sale was open only to shoppers using the company’s smartphone app.

Restricting the sale to its app helped Flipkart drive as many as five million app downloads last week, Flipkart chief product officer Punit Soni said.

“We have exceeded all our targets,” Soni said. “The idea to go app-only was validated. We took the app and tweaked and fixed and optimized it such that it became a 10MB app from 25MB earlier. When we did that, we started seeing more and more people adopting it.”

Online fashion retailer Myntra, which is owned by Flipkart, also saw an increase in demand, reporting a fourfold jump in the value of goods sold last week, compared with the previous week.

Amazon India (owned by Amazon Seller Services Pvt. Ltd) reported a fivefold increase in the number of new customers on its site, compared with traffic on a non-sale day. During the five-day sale, more than 70% of customers’ orders were placed through its mobile app. Sellers on its platform saw sales grow 8-10 times last week compared with non-sale days. Amazon, which has more than 30,000 sellers, declined to specify the number of sellers that generated the surge in sales.

Amazon India reported its biggest ever daily sales on consecutive days last week, country manager Amit Agarwal said. “This is turning out to be the greatest sale we have seen both from experience and demand perspective. Pretty much all our categories have been hitting their biggest days and beating them in consecutive days. And what is even more exciting for us is that despite the massive surge in demand, we are continuing to make sure that customers get it right and very fast.”

While Flipkart went head-to-head with Amazon India last week over the five-day sale period, some other e-commerce companies avoided competing directly with the two firms.

Snapdeal, India’s second largest online marketplace, is holding its sale over several weeks by offering single-day sale events. Last Monday, Snapdeal (owned by Jasper Infotech Pvt. Ltd) said it generated roughly $100 million in gross merchandise value (GMV) during its Electronics Monday sale, which had discounts on smartphones, laptops, other electronics and home appliances.

Another online marketplace, Shopclues (run by Clues Network Pvt. Ltd) saw a sevenfold jump in traffic and orders. The company’s Diwali flea market, a six-day-long event that ends on Monday, generated one million orders. The Gurgaon-based company, which was doing close to 80,000 orders a day before the Diwali sale, generated 225,000-250,000 daily orders last week, said co-founder Radhika Aggarwal.

E-commerce firms were much better prepared to handle the surge in traffic this year compared with the chaotic sale events of last year.

During the Big Billion Day last October, Flipkart co-founders Sachin Bansal and Binny Bansal had to apologize to customers after the company was seen pushing up prices of some products ahead of the sale and cancelling orders because of inadequate stocks. The company also faced criticism from consumers after the website struggled to manage a surge in traffic.

The five-day sale worked better for Flipkart rather than a day-long event as the company controlled customer traffic by hosting sales on different categories every day.

Such sales events are likely to continue through Christmas.

There is increased pressure on Flipkart and Snapdeal to generate bumper sales in the festive period after revenue growth in these companies slowed in the first quarter of the financial year. The festival months account for more than half of their annual sales. Judging by last week’s numbers, the first—and the most important—phase of the festival quarter has gone well for online retailers.

This article was first published on Livemint.com

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Following vacancies can be applied for (only in Singapore).   

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.