Amazon, Flipkart festival sales beat slowdown blues, US firm claims No.1 spot

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Highlights of Amazon’s statement on Festival Sales 2019

Amazon, the US-based online retailer, released a bunch of numbers on the final day of its five-day festival sale to paint a surprisingly rosy picture of its performance during the biggest sales event of the annual online calendar.

Notable among the numbers was a 15-fold jump in the sales of smartphones during the sale period, though it was not clear whether the increase was calculated over regular sales or over the corresponding sale period last year.

The online retailer also said 99.4% of all PIN codes in India saw purchase activity on Amazon during the ‘Great Indian Festival’ that started on Sept 30 and ends today.

Quoting market analytics firm Nielsen, the US company also claimed that it was the No.1 online retailer during the sale period, which also corresponded to the Big Billion Days sale of archrival and Walmart unit Flipkart.

It said the Nielsen numbers were based on studying the shopping patterns of 1.9 lakh customers in 50 cities across the country. Rival Flipkart, however, continued to maintain that it was the No.1 online retailer.

NO SLOWDOWN

The key takeaway from the final-day reactions of Amazon and Flipkart was that there has been no slowdown in online retail this festival season, despite a marked decline in the broader sales of discretionary and big-ticket items such as cars and real estate in recent months.

Both Flipkart and Amazon maintained that they did as well during this festival sale as they did at similar events in any of the recent years.

Amit Agarwal, who heads Amazon in India, attributed it to the company’s focus on delivering savings to customers.

He said Amazon’s model, based on bulk purchases and deep discounts, works just as well — if not better — in times of a slow-down as it does in more normal times.

“Our approach works over all economic conditions,” he told CNBC TV18. “The growth is getting faster as the flywheel is spinning faster… The year-over-year growth at Amazon continues to be as good as those of previous years.”

“On the busiest day, there were more than 600 flights delivering packages for our customers,” the company said.

There is some evidence from the US market to suggest that consumers tend to focus on low-price retailers — such as Costco — in times of economic turbulence and uncertainty.

Flipkart too said it saw no signs of a slowdown.

“We are seeing normal growth across all our categories,” Vice President Anil Goteti said.

“I don’t think any slowdown is happening for us in 2019 compared to the previous years. All the numbers are giving us the indication that this year is going to be bigger than any other year.”

Not surprisingly, Goteti denied claims that his website had lost the crown of being the No.1 destination for online shoppers in India.

Goteti said, somewhat incredibly, that Flipkart accounts for about 70% of the online retail market, and this actually went up to 73% during the Big Billion Days sale over the past five days.

Flipkart and Amazon have a history of giving widely differing estimates of each other’s market shares in an industry where hard numbers are very difficult to come by.

However, going by the broad indicators, the festival season sales for online retailers this year seems to have been better than what anyone expected, whether or not it is because people were keener on discounts this year or not.

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