What’s the Story?

Flipkart’s much awaited annual flagship BBD shopping event kicked off on October 16. For members of Flipkart Plus—the retailer’s free delivery and early access membership program—the sale commenced 12 hours earlier, on October 15. The event has enjoyed a strong start over the first three days and the company has released some initial numbers on the festival. Amazon’s GIF commenced in parallel, launching on October 16 for Prime members through early access and on October 17 for the general sale.

Why It Matters

BBD and GIF are two of India’s largest annual online shopping events. Amidst the Covid-19 affected economic environment, the trends and success of these events could be a noteworthy indicator of pent up demand, consumer sentiment and consumer spending in the country.

Big Billion Days 2020: The Event So Far

BBD 2020 is finally underway with Flipkart offering attractive discounts on various product categories including appliances, beauty and grooming, clothing, consumer electronics, home and furniture and mobile phones. Here are some of the highlights from the first three days of the sale:

• Flipkart reported that its sellers’ growth over two days of the sale matched the same level of growth achieved during the six days of last year’s sale.
• On October 16 and 17, Flipkart Wholesale (the Flipkart digital B2B marketplace) and the Best Price cash-and-carry stores saw more than 35,000 retailers and 18,000 kiranas take part in festivities across the fashion and accessories and grocery categories.
• Over 300,000 sellers, with around 60% coming from regions in “Tier 2 and beyond,” have catered to more than 250 million consumers across India.
• During the early access period and the first three days of BBD 2020, more than 70 sellers have reached “Crorepati” level, which means that they generated sales revenue in excess of ₹10 million ($136,285). Around 10,000 sellers have also reached “Lakhpati” level meaning that they have accumulated earnings of over ₹100,000 ($1,362.85).
• Over 1,500 new cities shopped for fashion this year. Sellers from 167 cities participated in the online sale for the first time.
• More than nine million visitors utilized the vernacular interface to access sales promotions on the online platform in regional languages, a function which was targeted toward shoppers in Tier 2 and Tier 3 regions.
• Flipkart reported 75% growth in prepaid transactions, with one in every five prepaid purchases from a high-ticket segment such as furniture, large appliances and electronics, and mobile phones. This was driven by the equated monthly payment (EMI) option.

Headline Deals Flipkart is offering a 10% additional discount to shoppers who make their purchases using a State Bank of India (SBI) Bank debit or credit card. The company is also offering cashback, exchange deals and no-cost EMI payment options during the sale. Flipkart offered a pre-booking facility for users whereby they could reserve certain products for ₹1 ($0.014) and pay the remaining balance during the sale. Apart from regular discounts on products, Flipkart is offering limited-period deals on select categories. These are categorized as three types of promotion: [caption id="attachment_117917" align="aligncenter" width="580"] Source: Flipkart.com[/caption]   1. Crazy Deals are available on select product categories and refresh every eight hours during the BBD event. These products tend to run out quickly as they feature heavy discounts, including:

• Up to 70% off office chairs
• Up to 75% off sofas
• At least 50% off sports shoes:
• Up to 50% off kitchen appliances

[caption id="attachment_117918" align="aligncenter" width="700"] Source: Flipkart.com[/caption]   [caption id="attachment_117919" align="aligncenter" width="580"] Source: Flipkart.com[/caption]   2. The MAHA Price Drop promotion (“maha” means “huge” in Hindi) offers an additional discount of 20% off products in select categories on top of existing cuts. These deals also refresh every eight hours. [caption id="attachment_117920" align="aligncenter" width="700"] Source: Flipkart.com[/caption]   [caption id="attachment_117921" align="aligncenter" width="580"] Source: Flipkart.com[/caption]   3. The Buy More, Save More deals offer discounts of up to 15% for purchasing higher volumes. For example, customers can get a 5% discount on buying three wall decoration items, a 10% discount on buying four and a 15% discount on buying five items. [caption id="attachment_117922" align="aligncenter" width="700"] Source: Flipkart.com[/caption]   [caption id="attachment_117923" align="aligncenter" width="700"] Source: Flipkart.com[/caption]  

Amazon Great Indian Festival 2020

[caption id="attachment_117924" align="aligncenter" width="580"] Source: Amazon.in[/caption] In order to compete with Flipkart in India’s fast-growing online retail market, Amazon launched its flagship GIF sale. Running at the same time as BBD, it launched on October 17 (or 24 hours earlier for Prime members) and currently has no specific end date. The event is expected to last for a month (compared to just six days in 2019). Amazon partnered with HDFC Bank to offer an additional 10% discount for credit and debit card users, as well as providing exchange options and no-cost EMI payments to make deals more attractive. Following the first two days of its GIF event, Amazon reported:

• More than 110,000 sellers received orders during the first two days of the sale from around 98.4% of the postal codes in the country. Of these, 66% of sellers, 91% of new customers and 66% of new Prime sign-ups were from people living in small towns.
• Approximately 91% of the festival’s new customers are from smaller cities. A number of these consumers opt to access the sale in Hindi, Kannada, Malayalam, Tamil and Telugu.

Festival Offers: Flipkart BBD vs Amazon GIF

While both Flipkart and Amazon are offering lucrative discounts across categories including accessories, appliances, consumer electronics, fashion, furniture, kitchen products and mobiles during their sales events, there are some key differences in the promotions. [caption id="attachment_117925" align="aligncenter" width="700"] Source: Company websites[/caption]  

Conclusion

Both BBD and GIF appear to have got off to a strong start, according to data released by the companies so far, with particularly significant impacts in towns and cities beyond Tier 1. With BBD likely to conclude on October 21, we will continue to track and cover the event.