Flipkart hits $100 million Big Billion Day Sale target in 10 hours
Bangalore/New
Delhi/Mumbai: India’s biggest online retailer Flipkart took just 10 hours to
hit its target of $100 million in gross merchandise value (GMV), or the value
of goods sold, on Monday, when it hosted its Big Billion Day sale,
its
co-founders Sachin Bansal and Binny Bansal said. The day saw significant
offline and online activity by rivals Snapdeal and Amazon’s local operation
(the first took out ads mocking Flipkart’s sale; and anyone who typed
BigBillionDay.com on their browsers landed on the Amazon.in site), confirming
that e-commerce wars are the contemporary version of the cola or soap wars.
Snapdeal on Monday ran a campaign with the tagline: “For others it’s a big day.
For us, today is no different.” Amazon has been running a sale from 4-6 October,
calling it the Mission to Mars weekend. The Flipkart sale could set the tone
for this festive season, the business end of which is likely to be played out
online, as Mint first reported on 9 September.
The festive season normally sees
a spike in sales of everything from apparel to electronics to cars and bikes to
jewellery, even paints.
Meanwhile, scared at seeing customers rushing in droves
to e-commerce firms Flipkart, Amazon and Snapdeal, offline retailers are being
forced to increase discounts and promotional schemes this festive season even
at the cost of a significant hit to their margins. Flush with money from recent
fund-raising efforts, Flipkart,
promoted by Flipkart India Pvt. Ltd, and rival
Snapdeal are pulling out all stops to woo shoppers in a period that is crucial
for them to justify, and possibly increase, their soaring valuations. The
world’s largest retailer Amazon, meanwhile, is matching every step and
promotional offers by local firms as it seeks to become the biggest player in
India. “The Big Billion Day is an unprecedented day for us as this is the
biggest sale ever in India. We are delighted by the overwhelming response from
our customers since 8 am today.
We got a billion hits on our site today and
achieved our 24 hour sales target of $100 million in GMV in just 10 hours,”
Sachin Bansal and Binny Bansal—who are not related—said in a statement.
Snapdeal also said it had a record breaking day of sales on Monday. “We
witnessed sales of over a crore rupees a minute,
with lakhs of products being
sold in a single day,” Snapdeal’s co-founder and CEO Kunal Bahl said in a
statement. “Over a million Snapdeal apps were downloaded in one day.” “The best
part of the day: we didn’t really spend much to bring customers to Snapdeal,”
he added. “We promise to deliver great value on great selection of products
every day to all our new and existing customers and that is the simple recipe
that continues to work for us.
” The ad wars According to TAM AdEx India, a
division of TAM Media Research Pvt. Ltd, which tracks advertising volumes and
spending across media, between the first half (January-June) of 2005 and the
first half of this year, the category that includes e-commerce companies moved
up from fifth rank to third in terms of TV advertising volumes. In print, the
segment moved up from fourth to first, and in radio, from second to first.
According to TAM AdEx, between the first half of 2010 and the first half of
this year, TV advertising by e-commerce firms grew almost three times by volume
and radio advertising six times (print advertising by e-commerce firms grew by
a modest 40% in this period). Thanks in part to the tens of crores spent,
primarily by Flipkart, which promised “India’s biggest ever sale” on Monday, as
well as rivals Amazon and Snapdeal on advertising their festive season sales,
millions of people are expected to buy all kinds of things on these sites,
quite possibly at the expense of offline retailers. Flipkart, Amazon and
Snapdeal together spent more than Rs.100 crore on advertising their festive
season sales ahead of Monday, according to one person familiar with the matter
who spoke on condition of anonymity. The offline challenge The change in buying
habits of customers, who are now fast getting used to around-the-year discounts
on e-commerce sites, is forcing offline retailers to react.
Although e-commerce
accounts for less than 1% of the total retail market in India, it is by far the
fastest growing retail channel. It is estimated to grow to as much as $22
billion (excluding travel) in five years from $3.1 billion currently, according
to a November 2013 report by CLSA. With prices of several products, including
clothes, phones, tablets and computers, at all-time lows on e-commerce sites
during the ongoing festive season, offline retailers are now increasing their
discounts and promotions to try and stem the loss of customers, even though
such prices may be, in their own words, “unviable”.
“Yes, it will dent retailer
margins but what’s the option? It’s still better than losing market share and
sitting on a ton of dead stock,” said Harminder Sahni, managing director at
Wazir Advisors, a consumer goods and retail consultancy. “This situation for
offline retailers is only going to get worse. Retailing is getting more
efficient and more technology-based and Amazon, Flipkart and other e-commerce
sites are much ahead of offline retailers in these aspects.” “Today it’s no
longer about having offers only during the sales period. Consumers are
bombarded with offers throughout the year,” said Harkirat Singh, managing
director of Woodland, an outdoor and adventure shoes brand with 480
company-owned stores and 4000 shop-in-shops. “We have to accept this change in
the market place and consumer behaviour and change with market.
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