Festive Season Sale: Who’s Winning the Great Indian eCommerce Battle?

27th Sep, 2017


By DataWeave Marketing

In the lead up to October’s Diwali celebrations, almost all major Indian e-retailers had announced mammoth sale events for last week. Resuming the epic battle of India’s online shopping carts during festival seasons, Flipkart, together with Jabong and Myntra, kicked off their five-day-long “Big Billion Days” sales on September 20, while Amazon India‘s “Great Indian Festival” launched the next day.

The stakes were high as Amazon and Flipkart are more evenly matched this year than ever before, making predicting an eventual winner of these dueling discounters a lot tougher than in previous years.

At DataWeave, our proprietary data aggregation and analysis platform enabled us to easily assess which e-retailer offered better deals and discounts. Over the last two weeks, we have been consistently monitoring the prices of the top 200 ranked products in Amazon, Flipkart, Myntra, and Jabong, across several sub-categories of Electronics, Men’s Fashion, and Women’s Fashion, encompassing over 35,000 products in total.

Divergent Discount Strategies

In our analysis, we bring focus to the additional discounts offered by competing e-retailers during the sale, compared to prices before the sale. This is key, as today’s shoppers often encounter deep discounts on several products even on normal days, which could potentially dampen the value suggested by the large discounts advertised during the sale.

Based on our analysis, Flipkart clearly adopted a more aggressive pricing strategy this year, establishing a lead over Amazon in average discount percentage for Electronics and Women’s Fashion. Moreover, Flipkart launched additional discounts on a larger number of products across categories. Amazon, though, offered 6.9 percent additional discounts on smartphones compared to Flipkart (6.2 percent), led by 10.7 percent discount on Apple and 7.7 percent discount on Redmi smartphones.

Flipkart has already reported a doubling of revenue from the sale (which includes sales volumes of Myntra and Jabong) compared to last year, and claimed it accounted for 70 percent of eCommerce sales during these five days — beating Amazon by a considerable margin. Amazon, for its part, reported a “2.5X growth in smartphone sales, 4X increase in large appliances and 7X in fashion sales.”

The difference in discounting strategies between Amazon and Flipkart is starkly illustrated by their respective highest discounts. Flipkart led the way with a 65.5 percent discount on Vero Moda skirts, a 65 percent discount on Tommy Hilfiger skirts, and 50 percent off Calvin Klein sunglasses.

By contrast, Amazon’s greatest discounts were an 83.4 percent discount on Redfoot formal shoes, 45.5 percent on Motorola Tablets, a 40 percent on US Polo T-shirts, and a 25.1 percent discount on Puma sports shoes.

Also, Flipkart hosted a more premium range of products in its assortment compared to Amazon, evidenced by a higher average MRP for its discounted products. Surprisingly, Amazon’s spread of discounted products has the least average MRP in Electronics and Women’s Fashion, compared to all other competitors.

New Products Break Through the Top 200

What’s fascinating in this battle of the e-retail giants is the correlation we uncovered between prices and rank. During the sale, as prices dropped on hundreds of products across the board, newer products successfully broke through into the Top 200 ranks for each sub-category. New products in the top 200 ranks had higher discount levels than the ones they replaced.

This trend was especially pronounced in fashion, where we observed an almost complete overhaul of products filling the Top 200 during the sale period, led by sports shoes in Amazon, Men’s shirts in Flipkart, and Men’s formal shirts in Jabong.

What About Pre-Sale Prices?

Another angle we explored was whether (like most of us suspect) e-retailers increase their prices before a sale, only to reduce them during the sale, so they can advertise higher discounts. We observed that all e-retailers did increase their prices for an albeit small set of products before the sale.

While the number of products where the prices increased for each website prior to the sales is small, it is interesting to observe that certain brands choose to perform the oldest trick in the retail book even today — raising prices to accentuate the degree of discount during the sale period, something shoppers need to keep an eye out for.

A Sign of Things to Come?

Based on our analysis, Flipkart has recognized the threat from Amazon and has approached this year’s “Big Billion Days” sale aggressively. It has dug deep into its freshly funded pockets, and offered better discounts for a larger set of products across most categories, in its attempt to lock down a greater market share in the burgeoning Indian eCommerce space.

Amazon, though, has continued to maintain a firm grip on the Indian consumer, having achieved tremendous growth in specific categories during the sale.

What’ll be interesting now is to see how these pricing strategies impact company revenues and margins, and how this will shape the soon-to-follow Diwali sales in mid-October.

If you’re intrigued by DataWeave’s data aggregation and analysis technology, and would like to learn more about how we help retailers and brands build and maintain a competitive edge, please visit our website.

- DataWeave Marketing
27th Sep, 2017

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