This Festival Season, Flipkart And Amazon Will Faceoff For Up To $3 Billion

India’s e-commerce business during Diwali may touch $2.5-3 billion this year

An e-commerce website opened on a laptop. (Source: Pixabay)
An e-commerce website opened on a laptop. (Source: Pixabay)

Walmart Inc.’s first big battle with Inc. in India will be for festival sales of up to $3 billion.

India’s largest online retailer Flipkart, now controlled by Walmart, will square off with Amazon in the five-day Diwali sale in October. E-commerce gross sales during the period are expected to hit $2.5-3 billion (up to Rs 21,000 crore), according to a latest report from RedSeer Consulting. That will make the biggest ever and twice as much as last year’s $1.5 billion.

“The way the companies are investing in newer categories, and wider coverage of products, it is suggestive that pool of shoppers looking to shop online is bigger than ever,” Mrigank Gutgutia, engagement manager at RedSeer, said over the phone. The research firm expects the number of Indians shopping online during the season to jump from 13 million to about 20 million this year.

The Diwali festival, considered auspicious for buying, is the most important sale season for e-commerce companies. They generate nearly 30 percent of the overall sales during the month, according to Satish Meena, forecast analyst at Forrester Research. Both Amazon and Flipkart attract users with discounts, exclusive tie-ups, new products and faster delivery.

Gutgutia said the push to sell goods like televisions and refrigerators online is also driving the shift from offline to online. Still, according to the RedSeer report, sales will be driven by mobile categories.

Amazon, in the run-up to the sale season, launched a Hindi website to make easier for the shoppers from smaller towns. The retail giant, according to its August filings with the Registrar of Companies, also pumped in nearly Rs 2,700 crore into the Indian business.

Flipkart launched an independent platform 2GUD to cater the refurbished market. It’s also betting big on furniture with the launch of its private label Perfect Homes.

For Flipkart, the upcoming sale is the first after it was acquired by Walmart. Last year, the group, including Jabong and Myntra, accounted for 58 percent of the business compared with Amazon’s 26 percent. For the Seattle-based giant, it’s an opportunity to narrow the gap.