What’s the Story?

Amazon held its annual flagship sale event, Prime Day, in India on July 26–27, 2021—earlier than last year’s two-day event in August but later than the June 2021 timing of Prime Day in the US and other Western markets, with the delay due to surging Covid-19 cases in India. This year, Amazon’s fifth Prime Day in India primarily focused on “empowering and supporting” thousands of small and medium-sized businesses (SMBs), including sellers, manufacturers, startups and brands, women entrepreneurs, artisans, weavers and local shops. According to the e-commerce giant, the idea was to help these companies bounce back from the economic disruption caused by the pandemic, especially the second wave. This year’s event also had special deals for customers from thousands of local and small sellers during the lead-up to Prime Day between July 8 and 24.

Why It Matters

Amazon’s annual Prime Day is a multibillion-dollar sales event. In its press release dated October 15, 2020, Amazon stated that during the two-day event in 2020, sellers saw sales of over $3.5 billion in total across 19 countries, and Prime members globally saved over $1.4 billion through deals and deep discounts. Last year, the two-day event in India on August 6–7 saw an overwhelming response from both sellers and customers, with participation from over 91,000 SMBs such as artisans, weavers and women entrepreneurs from more than 5,900 zip codes in India. Amazon claimed that as many as 209 sellers became “crorepatis,” (with sales of more than ₹10 million, or around $134,000), during the 48-hour sale period, and over 4,000 sellers clocked in sales of more than ₹1 million (around $13,400). Indian newspaper The Times of India reported that Amazon sources confirmed the event generated estimated sales of over $600 million. The 2020 event also saw double the number of customers signing up for Prime membership compared to 2019, and 65% of those were from Tier 2 and Tier 3 cities. This year, Amazon has also introduced the Prime Youth Offer, through which customers in the 18–24 age group can avail a 50% discount on Prime membership. The Prime Day event, which serves as a precursor for Amazon’s upcoming “Great Indian Festival” in October 2021, helps Amazon secure new Prime members who will be on the lookout for deals and offers during the upcoming sale season. [caption id="attachment_130864" align="aligncenter" width="724"] Amazon Prime Youth Offer
Source: Amazon India [/caption]  

Insights from Amazon’s India Prime Day 2021: In Detail

Amazon’s Preparations for India Prime Day 2021 Like last year, Amazon ramped up its digital initiatives and operational capabilities ahead of Prime Day 2021, which we detail below. Investment To Expand Its Fulfillment Centers, Grow Storage Capacity  In a press release dated July 15, 2021, Amazon India announced that it had expanded its operational network by offering more than 43 million cubic feet of storage space for sellers pan-India. Amazon India launched 11 new fulfillment centers and expanded nine existing ones to deliver a smarter, faster and superior experience for its customers and sellers ahead of the upcoming sale season. The company also made some of the fulfillment centers operational before Prime Day 2021 to ramp up its operational capabilities. With the current expansion, Amazon India has more than 60 fulfillment centers and over 25 specialized sites across the country to cater to daily essentials and grocery. Amazon launched one such specialized fulfilment center in Bihar on July 23, 2021, just before Prime Day. With a storage capacity of about 300,000 cubic feet, this center was used to store and process customer orders for large appliances and furniture categories. More than 11,000 sellers in the state benefited from the expanded network to reach an extensive customer base with a wider selection and faster deliveries. Digital Initiatives To Help MSMEs Amazon India launched its first “Digital Kendra” on July 8, 2021, in Surat, Gujarat. A Digital Kendra is a physical resource center for helping MSMEs (micro-, small and medium-sized enterprises) learn about e-commerce and sell on Amazon. These centers offer a host of services such as shipping and logistics support, cataloging assistance, digital marketing services, GST and taxation support to kickstart their e-commerce journey. The move comes from Amazon’s pledge in January 2020 to bring more than 10 million MSMEs online by 2025. Moreover, this year’s Prime Day focus for Amazon was on supporting MSMEs to recover from pandemic-induced losses by offering them ample opportunities to sell through the platform. Launch of “Multi-Seller Flex” Program Amazon India launched the “Multi-Seller Flex” (MSF) program on July 21, 2021, ahead of Prime Day, to enable sellers from Tier 2 and below towns to partner with local entrepreneurs for inventory storage and customer order processing. Amazon provides shipping and logistics support for seller shipments. Sellers engage with the nearest MSF sites to make their products available to customers pan-India and save on transportation costs involved in sending the products to Amazon fulfillment centers outside the cities. As part of the MSF program, sellers earn a Prime badge for their listings, gaining access to millions of Prime members. The company stated that thousands of sellers from about 100 Tier 2 and below towns that were using MSF participated in Prime Day 2021. Other Initiatives for Consumers and Retailers Along with onboarding MSMEs, Amazon India tries to lure customers into the e-commerce market and has partnered with third-party retailers to roll out Amazon Easy stores. Easy stores help introduce consumers to e-commerce with “assisted shopping” on Amazon’s online marketplace. Partnering retailers can also sign up to the “I Have Space” program, in which the stores act as distribution hubs to deliver orders to their local area, becoming an end-to-end Amazon touchpoint. We expect such initiatives to bring more consumers online, thereby increasing India’s online retail market share, which currently accounts for only 2.5% of India’s organized retail sales share of 12%, according to estimates by Invest India, the National Investment Promotion and Facilitation Agency. [caption id="attachment_130865" align="aligncenter" width="725"] Amazon Easy Store
Source: About Amazon Blog [/caption]   Highlights from Amazon’s India Prime Day 2021 As outlined by Amazon before the event, Prime Day 2021 focused on supporting MSMEs during the two-day sale and the lead-up period. Below, we summarize highlights from the event, which were released by Amazon India on July 29, 2021. Business Highlights

• According to the company, Prime Day 2021 marked a new record for the most MSMEs selling on Amazon India, with customers from over 96% of India’s zip codes (more than 6,800) placing orders with them—up by over 900 from last year.
• During the lead-up to Prime Day and on the event days, Prime members shopped from 126,003 sellers (a 38.5% increase from Prime Day 2020) such as artisans, weavers, women entrepreneurs, startups, brands and local offline neighborhood stores across India. Of these sellers, 68% were from Tier 2, 3 and 4 cities such as Barnala (Punjab), Virudhunagar (Tamil Nadu) and Valsad (Gujarat), among many more.
• Amazon claimed that 31,230 sellers witnessed their highest-ever single-day sales, and about 25% more sellers grossed sales of over ₹10 million (around $134,000) compared to Prime Day 2020.
• More members signed up for Prime Day this year, with over 70% of new members from Tier 2, 3 and 4 cities signing up compared to 65% last year.
• More than 70% of new Prime members shopped from outside of the top 10 cities, including towns like Ananthnag (Jammu and Kashmir), Tawang (Arunachal Pradesh), Gadag (Karnataka) and Kasargod (Kerala).
• Compared to last year, on day one of Prime Day 2021, three times more Prime members used Amazon Pay (a payment-processing service that allows Amazon users to use the payment methods already linked with their Amazon account to pay for products and services on Amazon and other external sites).

Shopping Highlights

• The Personal Computing, Beauty, Apparel, Home & Kitchen, Smartphones and Pantry categories saw the highest numbers of units sold.
• Members purchased large appliances such as washing machines, refrigerators, microwaves and other home appliances, including mixer grinders, choppers and water purifiers from prominent brands.
• Work/study-from-home purchase trends continued, with members purchasing laptops, printers, monitors, TVs, wearables and storage from top brands such as Apple, Dell, HP and Lenovo in laptops; Brother, Canon, Epson and HP in printers; BenQ and LG in monitors; boAt, Mi, Sony and Redmi in TVs; Amazfit, FCUK and Mi in wearables; and SanDisk, Seagate and WD in data storage.
• Sanitization, health and safety were members’ top priority, with strong sales in health and personal care products from Dabur, Dettol, Himalaya, Lifebuoy, Lizol and Savlon.
• Apparel saw a surge for casual wear, with summer wear and home/loungewear categories among the most sought after by consumers. Beauty and self-care also witnessed an increase in sales from bestselling brands such as Biotique, Dove, L’Oréal, Mamaearth, Nivea and WOW.
• The Fire TV Stick was the bestselling product on Prime Day, and the Echo Dot featured in the top 10. The Onida Fire TV was among the bestselling smart TVs during Prime Day.
• Alexa answered over 3 million requests from customers during Prime Day, guiding them to the products, best deals, new launches, bill payments and much more. One in every 10 smartwatches and one in every six smartphones sold this Prime Day had built-in Alexa.

Product Launches and Offerings

• During the lead-up to Prime Day, around 100 SMBs launched over 2,400 unique and differentiated new products across categories such as Home & Kitchen, Fashion, Beauty, Jewelry, Stationery, Lawn and Garden, Grocery and Electronics.
• More than 500 women-led businesses, non-governmental organizations and government bodies from Amazon Saheli—a special initiative by Amazon to encourage women entrepreneurs in India—offered a selection of over 90,000 products across categories such as Fashion, Jewelry and Books.
• Prime Day saw more than 300 new product launches from top Indian and global brands such as Adidas, Baidyanath, Bajaj, boAt, Cadbury, Dabur, Eureka Forbes, FCUK, Hasbro, Himalaya, IFB, Intel, LG, Mamaearth, Max, The Moms Co, MyGlamm, Nescafé, Samsung, Surf Excel, Whirlpool, Wipro, Woodland and Xiaomi.

[caption id="attachment_130866" align="aligncenter" width="724"] Product launches from top brands on Prime Day
Source: Amazon India [/caption]  

• Some exclusive brand launches included One Plus Nord 2, Redmi Note 10T 5G, Samsung M21 2021 edition, LG (5S) OLED Smart TV, Intel-powered laptops, IFB washing machines, Aquaguard water purifiers and FCUK smartwatches. One Plus Nord and Redmi Note 10 series were the top-selling brands in the Smartphones category.
• Over 75,000 local shops on Amazon sellers from more than 450 cities in India made their debut on Prime Day.

Deals, Discounts and Offers

• Headline deals this year included up to 40% discounts on mobile phones and accessories, up to 60% discounts on Electronics and accessories, up to 65% discounts on TVs and appliances, and up to 70% discounts on Home & Kitchen, Books, Toys, Gaming and various Amazon brands. Deals also included 20%–60% discounts on Daily Essentials, 80% discounts on Amazon Fashion and up to 50% discounts on Echo, Fire TV and Kindle.
• This year, Prime Day’s “Save Big” offer gave an instant 10% discount for consumers using HDFC Bank debit/credit cards and EMI (equated monthly installment) transactions—a fixed payment made by the customer to the seller on a specified date of each month. Prime members using an Amazon Pay ICICI Bank credit card enjoyed unlimited 5% reward points on purchases during the 14-day lead-up to Prime Day.
• Prime members received a 10% cashback up to ₹150 ($2.00) on their Prime Day purchases from millions of unique products offered by SMBs.
• Over 1.2 million artisans from Amazon Karigar—a program for artisans, weavers and makers of handicrafts and handloom products, or similar to sell their products on Amazon—offered deals on over 272 crafts, such as Sambalpuri sarees, jamdani sarees, block printed dresses and blue art pottery from all over India.
• Prime Day 2021 saw offers and deals from hundreds of emerging brands from Indian startups under Amazon Launchpad, more than 680,000 women entrepreneurs from Amazon Saheli and over 50,000 neighborhood stores and small sellers from local shops across India.
• Amazon offered up to 55% discounts on Gaming and accessories, up to 60% discounts on Kitchen Picks from local shops, and Blockbuster deals on Amazon Echo Dot, Fire TV, EarPods, Mixer Grinders and Luggage.
• Prime Day also featured “WOW deals” across watches, headphones, power banks, accessories and more categories on both days between 4.00 p.m. and 6.00 p.m.

Entertainment and More

• Prime Video announced the world premiere of much-anticipated movies across multiple regional languages such as Hindi, Malayalam, Kannada and Tamil during the 14-day lead-up to Prime Day. These movies were watched in over 3,200 towns and cities in India and over 150 countries and territories globally, indicating the increasing viewership and popularity of regional language films in India and globally.
• Prime Day also marked the launch of web series, international cinema and an immersive music experience, including mixtape series and award-winning artists’ music performances. During the week leading up to Prime Day, members listened to music in over 50 languages (more than 20 Indian and 30 international languages).
• Prime members streamed podcasts in multiple languages such as Hindi, English, Tamil, Telugu and Bengali, among other languages. The top five podcasts streamed during the lead-up period were Woice with Warikoo Podcast, Sadhguru, TED Talks Daily, Gita for Daily Living and Ponniyin Selvan.
• Prime Reading offered eight new titles featuring India’s top authors and thought leaders, such as Preeti Shenoy (Fiction/Romance), Devdutt Patnaik (Mythology/Spirituality) and Sumanth Raman (Healthcare in India. Prime Reading ebook-borrowing customers increased by 50%, and there was a 50% rise in first-time borrowing.

The Comeback of Shein to India Through Amazon’s Prime Day  China-based online clothing brand Shein has made a comeback to India through Amazon’s Prime Day—18 months after the Government of India banned the brand along with some 59 Chinese apps amidst the Galwan Valley skirmishes in Ladakh between India and China. Shein made its entry on Amazon India with over 500 product search results, although the fast-fashion brand received criticism that some of its products on the platform were older and on sale for higher prices than previously offered on its own e-commerce site. [caption id="attachment_130867" align="aligncenter" width="726"] Customer responses about the comeback of Shein through Amazon India during Prime Day
Source: Twitter.com [/caption]   Shoppers Grumble About Price Discrepancies, Order Cancellations, Payment Failures, Delivery and Other Technical Issues As seen in previous years, some shoppers took to social media to share grievances about Prime Day 2021—and Amazon India was quick to respond to its customers.

• One Twitter user complained that the Epson EcoTank L3110 All-in-One Ink Tank Printer’s “Prime Day exclusive deal” price was higher than its “regular price” on Amazon India. Amazon Help apologized for the inconvenience and asked the customer to share the product link page to be shared internally for escalation.

[caption id="attachment_130868" align="aligncenter" width="725"] Source: Twitter.com[/caption]  

• Another user criticized a book deal on Prime Day as being ₹300 ($4.00) more expensive than its regular price.

[caption id="attachment_130869" align="aligncenter" width="680"] Source: Twitter.com[/caption]  

• Some users reported that orders were received in a damaged condition. For example, one user received their “Premium Fard Dates” in a broken box, with dates popping out of the box. Amazon apologized and asked the customer to report the issue to its support team.

[caption id="attachment_130870" align="aligncenter" width="726"] Source: Twitter.com[/caption]  

• Some users faced issues placing orders and experienced cancellations due to multiple payment failures with Amazon Pay. One user trying to purchase a Whirlpool 6.5kg washing machine said that every time they place an order for the item, it got canceled due to payment failure. Although the Amazon team advised the user to try other payment options, it was told that even those methods failed.

[caption id="attachment_130871" align="aligncenter" width="725"] Source: Twitter.com[/caption]  

• Some users experienced difficulties in requesting items to be shipped to their locations, despite trying multiple zip codes in the city. Amazon staff apologized and asked that such issues be reported to the support team.

[caption id="attachment_130872" align="aligncenter" width="725"] Source: Twitter.com[/caption]   Amazon Praised for Some of Its Deals

• Although some users faced issues with their Prime Day experience, others praised Amazon for the favorable prices offered via the Prime Day Exclusive deals.

[caption id="attachment_130873" align="aligncenter" width="725"] Source: Twitter.com[/caption]  

What We Think

Physical retailers in India were slowly recovering from the pandemic effects in the first quarter of 2021, but the second wave was a massive blow to their progress. Amazon’s Prime Day helped in empowering and supporting physical retailers and MSMEs, providing growth avenues to recover from the economic disruption caused by the pandemic. Amazon also expanded its fulfillment centers and partnered with sellers and MSMEs on the digital front through initiatives such as Digital Kendra, the Multi-Seller Flex Program and Amazon Easy stores. We saw pandemic-influenced shopping trends persist during Prime Day—with consumers purchasing products for working and studying at home, as well as focusing on health and safety. In addition to product launches, deals and discounts, Amazon also focused on its entertainment offerings during Prime Day this year, through Prime Video, Music and Reading. We believe Prime Day in India will be a precursor for Amazon’s upcoming flagship sale event, “The Great Indian Festival” in October 2021, with the e-commerce giant having used Prime Day as an opportunity to secure new sellers and customers. Implications for Brands/Retailers

• Brands and retailers should consider partnering with Amazon on digital initiatives and utilize its services to expand their e-commerce presence further in a pandemic-impacted retail environment.