Walmart Inc.'s Indian e-commerce subsidiary Flipkart sees this week's big sales event as an opportunity to introduce 200 million people to online shopping.
India's Big Billion Days began Sunday and runs through Friday. The event is likened by some to Black Friday in the U.S. as it kicks off the shopping season for the Hindu festivals Dussehra and Diwali. Flipkart created the online festival sale season in 2014, and it's already become an annual tradition for much of India's 1.3 billion population.
Diwali is one of Hinduism's major religious festivals, according to the Encyclopedia Britannica online. It lasts five days and occurs each fall. This year, Diwali begins Oct. 27. "It is generally a time for visiting, exchanging gifts, cleaning and decorating houses, setting off fireworks displays, and wearing new clothes," according to the encyclopedia.
Dussehra, mostly celebrated in northern India, falls on Oct. 8 this year.
Walmart acquired a 77% stake in Flipkart Group, India's largest e-commerce platform, in August 2018. The Bentonville-based retailer invested $16 billion in the e-commerce firm -- Walmart's largest deal to date.
Online retail rival Amazon.com runs a concurrent event called the Great Indian Festival. Both Flipkart and Amazon offer deep discounts on items such as clothing, smartphones and home appliances during the sale.
Flipkart said Monday that its first-day sales doubled last year's. Amazon reported record sales of $106 million during the event's first 36 hours.
"We started this festive season by setting audacious targets for ourselves and our teams," Flipkart Chief Executive Officer Kalyan Krishnamurthy said in a news release Monday. "By all indications this is going to be the biggest festive season that India has witnessed. There is no doubt that e-commerce has not only lifted consumer sentiment, but has also driven the industry to set new benchmarks."
Satish Meena, a senior forecast analyst with research firm Forrester, said in a blog post Thursday that he expects online retailers in India to ring up about $4.8 billion in sales during this year's "festive month," Sept. 25 through Oct. 29, despite a general economic slowdown in that country.
About 80% of those sales will occur during the six-day Big Billion Days/Great Indian Festival, Meena said. Smartphones will remain the largest shopping category, he said, accounting for about 36% of all sales. Fashion will follow at 24%, according to Forrester estimates, with consumer electronics at 16%.
Meena said retail spending is shifting from stores to online marketplaces as consumers look for better deals. This shift is occurring not only in large urban centers but in mid-size cities as well, he said. In fact, he expects online shoppers in the smaller cities, defined as 20,000 to 49,999 in population, to spend more during this year's festival season than last year "as they become more comfortable with online channels and getting access to brands and affordable financing options."
These smaller markets are exactly the ones Flipkart is targeting. The company says it's already strong in the metro areas, but has focused on growing its infrastructure across India. This broader reach gives an estimated 200 million people access to online shopping. The addition of a Hindi interface also will help the Flipkart app reach more people not yet shopping online.
Flipkart also has expanded delivery to the most remote locations through its logistics business eKart. It's also created an outreach program that enlists thousands of India's mom-and-pop stores, called kiranas, and general trade stores across 700 cities as delivery partners.
Mobile payment options such as Flipkart's digital payments app PhonePe -- which means "on the phone" in Hindi and is pronounced "phone pay" -- also are making it easier for online shoppers to pay for their purchases. A Keybanc Capital Markets analyst has pegged PhonePe's value at around $14 billion to $15 billion. PhonePe transactions have quadrupled in the past year in a competitive market that includes field leader Paytm, Google Pay and Amazon Pay.
Walmart said organized retail is a small part of the Indian market and e-commerce is only around 2% to 3% of that. However, 60% of the population or about 840 million people are projected to be using the Internet by 2022, with e-commerce worth $200 billion by 2026.
Business on 10/01/2019