Online marketplace Flipkart said it will hold its annual shopping festival, Big Billion Day, from 2 to 6 October, when it will go head-on with arch-rival Amazon India, the biggest showdown in Indian e-commerce ever.
This is the third edition of the Big Billion Day sale, which was first launched by Flipkart in October 2014. Apart from offering deep discounts on a wide range of products including smartphones, fashion brands, televisions and others, Flipkart has readied a no-cost EMI (equated monthly instalment) payment option for high-priced items and product exchange schemes to persuade customers to buy more.
“This year, our key focus is to ensure maximum value to our consumers by making quality products affordable and accessible. Great offers and exclusive partnerships will give our customers more options to choose from, and our innovative consumer finance, delivery and installation for large electronics and product exchange programs will only add to the customer delight this festive season,” said Kalyan Krishnamurthy, head, category design organization, at Flipkart.
Rivals Amazon India (Amazon Seller Services Pvt Ltd) and Snapdeal (Jasper Infotech Pvt Ltd) are also gearing up for what may well turn out to be the defining battle in Indian e-commerce. Amazon India has the momentum and superior spending power going into the festival sales period during which e-commerce firms typically generate a majority of their annual sales as customers spend freely on a host of products. Amazon overtook Flipkart on a standalone basis in terms of gross sales in the months of July and August,Mint reported on 12 September.
Amazon India has expanded its product selection by three times to 80 million, added thousands of new sellers, built massive warehousing space and grown its offline shopping initiative ahead of the key festive season period next month. The company is expected to hold several sales events in October. Snapdeal is also firming up plans for a sales event. A Snapdeal spokeswoman said that the company would also hold a sales event around the time of Diwali, but declined to share further details.
“My message to my team is very simple — be paranoid because consumers will shop on your site only till the point that they find a better experience elsewhere. So, they need to be extra paranoid that they don’t let down the guard in providing customers the experience they want,” Amazon India head Amit Agarwal said in an interview last week.
The stakes have, arguably, never been higher for Flipkart, which also owns the fashion retailers Myntra and Jabong. This Diwali could prove to be a make or break quarter for Indian e-commerce sector’s poster boy. If Flipkart has a successful Big Billion Day sale, it may get the platform to keep improving its results and raise a fresh round of funds. If Amazon comes out as a big winner then it may force a shakeout in the e-commerce business.
“If anyone is expecting the likes of Flipkart to gain market share this festive season, that’s not going to happen. Everybody else is also gearing up and is on the same footing effectively. What do they have in hand right now? Brands anyway won’t allow more discounts than is available offline. For Flipkart, it’ll be an achievement if they ensure that they don’t concede any further market share,” said Harminder Sahni, founder and managing director of Wazir Advisors.
There are encouraging signs for Flipkart though. While the company lagged Amazon in July and August on a standalone basis, it finally registered a strong increase in monthly sales, indicating that the company is turning around its business under CEO Binny Bansal, who has been focusing on raising Flipkart’s customer service levels.
Meanwhile, Krishnamurthy has shaken up the product category teams that are responsible for driving sales. Krishnamurthy, a former executive at Flipkart’s largest investor Tiger Global Management, has set aggressive sales, product selection and other targets, and insiders say that he is breathing down the neck of executives to meet these goals.
The efforts of Bansal and Krishnamurthy have started yielding results. Flipkart’s net promoter score, a key measure of customer satisfaction, is estimated to have risen significantly to more than 40 in August from around 30 in June, one person familiar with the matter said on condition of anonymity.