What’s the Story?

Flipkart’s annual flagship shopping event, Big Billion Days (BBD) 2020 came to an end on October 21. This year’s festival ran for six days and saw considerable interest, excitement and engagement during the event. Flipkart has not released total sales numbers, and many of the metrics it has published are indirect (such as number of sellers) or in absolute terms rather than in growth terms (such as number of deliveries completed within five days).

Why It Matters

This year’s BBD was much anticipated both for consumers and sellers, as well as for industry observers: It is the annual flagship event of India’s biggest e-commerce marketplace and took place in a depressed consumer market this year—albeit relatively favorable for e-commerce in comparison to in-store retail—amid the Covid-19 crisis.

Big Billion Days Wrap-Up: Focus on “Tier 2 and Beyond” Regions Drives Growth

BBD 2020, the annual shopping festival’s seventh edition, had a solid impact on micro, small and medium enterprises (MSMEs), particularly in Tier 2 and Tier 3 towns, according to Flipkart. The platform focused efforts toward penetrating deeper into non-Tier 1 cities and towns, which proved pivotal to its success. Flipkart did this by improving last-mile delivery capabilities, offering affordable financing options and introducing regional language interfaces, among other key initiatives. Of the 35%+ new sellers during this BBD, about 60% came from Tier 2 and Tier 3 towns. The “Flipkart Samarth” program for artisans and weavers recorded a sevenfold increase in the number of sellers. With the program having reached “7X” more cities, more than 60%+ Samarth sellers were from “Tier 2 and beyond” cities, with categories such as handloom cotton saree and home decor being among the top performers. Nandita Sinha, Vice President of Customer Growth and Engagement at Flipkart Group, said:

Flipkart’s aim this festive season has been to bring resilience back into the community. The remarkable enthusiasm from consumers has ushered in green shoots of recovery for everyone across the value chain. TBBD 2020 has been a celebration of sellers, artisans, kiranas and Wishmasters, who have delivered unmatched value to our consumers.

The revival in demand and resurgence of consumption is expected to remain even after TBBD, as we continue to uplift the entire ecosystem. This was also the first completely virtual BBD, as we adapted to the advent of a “new normal,” and its success comes on the back of the hard work of our teams across verticals and locations.

Key Highlights from BBD 2020 Flipkart’s reported metrics give little indication of the extent to which sales grew year over year, whether in total or by category. The press release did not unequivocally indicate that total sales grew versus 2019, while a number of data points focused on indirect metrics such as the absolute volume of deliveries in the first few days, the number of new sellers or figures for page visits. The following are some of the metrics from BBD 2020 as announced by Flipkart:

• More than 666 million page visits were recorded over the duration of the event, with over 52% of these coming from “Tier 3 cities and beyond.”
• The platform recorded 100 order placements per second.
• More than 10 million deliveries were completed in the first five days of BBD, with over 3.5 million via partner kiranas (local convenience stores).
• The platform saw “1.5X” the number of transacting sellers versus last year, of which over 35% witnessed “3X” more sales compared to BBD 2019. Flipkart catered to over 250 million consumers in India, across 20,000 postal codes.
• The number of “Crorepati sellers,” meaning those that generated sales in excess of ₹10 million (around $136,300), grew “1.5X”. The number of “Lakhpati sellers”, meaning those that accumulated earnings of over ₹100,000 (around $1,360), registered a “1.7X” jump.

The fashion category experienced 51% growth in customers from “Tier 2 and beyond” regions, compared to BBD 2019. According to Flipkart, 1,500 new cities shopped for fashion in this year’s event. Adidas, Metronaut, Puma, Saara and NIKE were the top-selling brands. Within the category, more than 16 million products were sold in total by over 40,000 unique brands and labels in fashion. The mobile category experienced “2X” growth in the number of customers visiting the category on Flipkart’s marketplace portal. Premium smartphones recorded growth of “3.2X,” mainly driven by Apple, Google and Samsung phones. There was 30% growth in the number of customers opting for product exchange for mobiles and 46% growth in the adoption of bank offers for mobile purchases versus BBD 2019. The electronics category registered “2X” growth versus BBD 2019, with products such as laptops, desktops, audio devices, cameras and tablets seeing the highest sales. Almost 3.5 million audio devices, including 1 million headphones, were sold by the close of day one. In the large appliances category, customers from Tier 3 regions drove sales, with almost 50% of total demand coming from shoppers in these regions. Flipkart claimed to have sold one television set every two seconds and one microwave every 14 seconds during the sale period. One in every 35 customers were small-office or home-office business owners. In the furniture category, Flipkart claimed that it received 1.5 orders every second for furniture products, with about 75% of these orders being prepaid and many customers opting for a three-year furniture-maintenance plan. The platform also reported that it set up 50,000 work-from-home desks across India. The beauty, general merchandise and home (BGMH) category registered 100% growth in unit sales versus BBD 2019, with 40% of the total units sold across categories being contributed by BGMH alone. Multiple subcategories experienced significant growth, including bakeware (“10X”), cleaning supplies (“3X”) and cookware (“3X”). [caption id="attachment_118089" align="aligncenter" width="380"] Source: Flipkart[/caption]  

What We Think

Flipkart’s reported metrics give few concrete indications of the sales trajectory this BBD: Its press release did not even unequivocally indicate that total sales increased year over year, although the company did confirm that selected categories such as electronics and BGMH saw positive sales growth. Although Flipkart’s event has concluded, Amazon’s Great Indian Festival will continue for around a month, with no specified end date. The lack of comparability (due to varying event length) and absence of data means it will be unclear which platform has outperformed in terms of sales. However, both Amazon and Flipkart have continued to bet on smaller towns and cities to drive sales growth, which has brought considerable success to both players in recent years.