Flipkart eyes Big Billion Days sale to woo customers

GROSS SALES OR GROSS MERCHANDISE VALUE (GMV) ACROSS ONLINE RETAILERS MAY REACH $1.7 BILLION IN THIS FESTIVE SALES PERIOD, A 62% RISE FROM THE YEARAGO PERIOD

BENGALURU: After winning last year’s make-or-break Diwali sale battle, online retailer Flipkart Ltd plans to add a large number of new customers for the first time in more than a year and extend its slender lead over arch-rival Amazon in this week’s Big Billion Days (BBD) sale.

Flipkart is betting on smartphones, televisions and refrigerators to drive sales to existing customers and on fashion, accessories and home and furniture products to lure new users, a majority of whom will be women, according to its estimates.

Amazon India (Amazon Seller Services Pvt Ltd), however, has beefed up its product assortment and supply chain capacity in the two key product categories of smartphones and large appliances, which account for a majority of sales in the festive period. The company has added a large number of smartphone exclusives and launched several new brands such as BPL in televisions. It has also built an independent logistics and warehousing network for large appliances, which it didn’t have last year, indicating it will push Flipkart close in sales of smartphones and televisions.

Analysts expect sales in this year’s festive period to be much higher compared with last year. Gross sales or gross merchandise value (GMV) across online retailers may reach $1.7 billion in this festive sales period, a 62% rise from the year-ago period, according to Redseer Consulting, a market research and consulting firm.

“Last year’s BBD was a lot about tapping into your existing user base, a lot about reactivating lapsed customers,” said Smrithi Ravichandran, senior director, Flipkart. “But this year’s BBD will be about a mixture of growing our repeat customers and also about growing new users in triple digit numbers. Because of the telecom players making inroads into the Tier 2-3 cities and towns, over the past few months we have seen a huge increase in the number of Tier 2-3 shoppers.”

Flipkart’s focus on attracting new users is a shift in its strategy of the past 15 months. Since Kalyan Krishnamurthy, now CEO of Flipkart, returned to the company in June 2016, he has pushed the online retailer to increase its focus on serving existing users. That’s because while Flipkart has a registered user base of more than 120 million people, the number of frequent shoppers is a small fraction of that.

Amazon, too, has adopted slightly different tactics for this year’s sale. Unlike last year, when it splashed on advertising, the company has reduced its marketing spending this year. A person familiar with the company’s strategy said it will instead pour cash into discounting.