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Sunday, October 25, 2020

Festival season sales: JioMart set to upset the cart for Flipkart, Amazon

This year’s e-commerce festival season sale, to be kicked off by Flipkart with its flagship ‘The Big Billion Days’ sale on October 16, followed by Amazon with its ‘Great Indian Festival’ sale on October 17, is expected to be a keenly contested face-off, with JioMart joining the fray.

While Covid tailwinds point to a very strong second half of 2020 for e-commerce, JioMart’s participation will upset the apple cart, and no single player will take a major lead in market share, say analysts and industry experts.

“With the entry of JioMart, deals, discounts and cashbacks will be back with a vengeance. There is no doubt that JioMart will upset the apple cart and break into the top three e-commerce players in India backed by its large offline retail presence, bulk sourcing capabilities for economies of scale, ownership of supply chain and warehousing and cross category campaigns where it will push its free mobile recharge, content, data and connectivity plans,” said Sanchit Vir Gogia, Chief Analyst, Greyhound Research.

E-tailers will have to widen their lens, because e-commerce will no longer be a single channel retail play but will morph into an omni-channel one that will see cross category campaigns spanning connectivity and content, he said.

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Battle of equals

Harminder Sahni, Founder and MD of Wazir Advisors, said that while category-wise leaders may emerge among e-commerce firms, with offline retail being badly hit by Covid, the industry will see overall growth and the top two e-tailers will grow at the same pace, emerging neck to neck from the festival season sale.

Indian e-commerce is estimated to grow 40% y-o-y in 2020, grossing $38 billion GMV, up from $27 billion in 2019, as per RedSeer Consulting. “Driven by the massive growth in online shoppers from 135 million last year to 160 million in 2020 owing largely to digitisation caused by the pandemic, the first festive season sales event is expected to grow 50% y-o-y over 2019 to reach $4 billion in GMV in 2020,” said Mrigank Gutgutia, Director, RedSeer Consulting.

Pointing out that Covid-19 has provided e-tailers with a very large addressable opportunity this year, Pinakiranjan Mishra, Sector Leader, Consumer Products and Retail, EY, said the e-commerce market can very easily support several large players in the country.

Factors that matter

“Since the outbreak of the pandemic we have seen a trend of people trading down across categories. Therefore, e-commerce firms will have to make sure that they stock up on SKUs at lower price points. More importantly, in addition to value pricing, e-commerce firms must also offer prompt delivery and installation services, wherever relevant.”

Offering a contrarian view, Arvind Singhal, CMD of Technopak said, “Flipkart was in the lead last year largely because of its fashion category but this season, demand for fashion and accessories is likely to be subdued. So, Amazon, overall, is expected to do better.”

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