MUMBAI: India’s online festive sales are somewhat missing the fiery spark this year. Price hikes have weighed on smartphone sales volumes, typically the biggest driver of the season with final prices in many cases higher than last year even after discounts. Price increases have also made durables costlier with the share of large-ticket purchases (overall) through EMIs having significantly gone up this year—on Amazon, for instance, purchases using no-cost EMIs have jumped to 50% from about 30% last year, said Aman Deep Lohan, director, home, kitchen and outdoors at Amazon India. Amid inflation shrinking household budgets, smaller-ticket items found more space in shopping carts with consumers prioritising value for money. At the end of a week’s sales, average order values (AOV) are lower with growth having been led by categories such as fashion, beauty, home and general merchandise.“Value commerce, which covers items priced below Rs 500, handled about half of all festive orders. AOVs are 7-8% lower than last year because the basket moved to lower-ticket categories and channels. By value, phones and electronics still lead; by growth, softlines lead,” said Nikhil Dalal, associate partner, Redseer Strategy Consultants, which captured data from Oct 8-12. On Flipkart, about 7 in 10 units sold were priced under Rs 500.Unlike other seasons when a major chunk of the sales happen during Navaratri (the first leg of sale), analysts expect sales this year to be more spread out through Diwali as consumers strike a balance between their pockets and desire to buy. Estimates from Datum Intelligence showed that sales dropped by about 7-10% in the first four opening days to Rs 29,800-30,900 crore. “Last year’s sales opened on Sept 22, the day the GST rate cuts took effect. This year’s opening had no such trigger,” analysts at the firm said.Shrinking discounts, bigger EMIsAs price hikes shrunk the quantum of discounts on offer, particularly in demand-heavy categories such as smartphones, consumers went bigger on EMIs to buy premium products. “Phones entered the sale with average prices about 15% higher than a year ago. so even a similar headline discount leaves the final price above last year’s festive price. Across devices, sale-day prices were only about 5% to 10% below pre-sale levels, depending on category. Discounts were deeper where inventory and competition allowed: smartwatches and smart rings about 10%-15% below pre-sale prices, and some budget phones 10-15%,” Dalal said. Consumers opted for EMIs to buy 55-inch television sets, premium laptops and make other upgrades, said Lohan. Flipkart has also enabled cross-category exchanges—for instance, an old laptop can be traded for a new phone. “EMIs and bank offers saw increased adoption, signifying how customers are leveraging affordability options for their purchases this festive season,” said a Myntra spokesperson.Small town shoppers lead the festive queueWith the coverage of the internet and smartphones expanding, more small town consumers are taking to online shopping. What also helps is the wider availability of brands on e-commerce platforms. On Flipkart, consumers from places such as Sardulgarh, Panskura and Kishanganj logged in, making up some of the fastest-growing markets at the opening of the sale. About 60-65% of orders on Amazon came from tier 2 and 3 markets.
