Festive sales growth is good, but not great in 2021

Festive season sales for Flipkart and Amazon India are strategically significant. These sales are their largest shot at growing their bases of transacting online consumers and reactivating dormant users. The festive season, usually in October-November, alone contributes to more than 20% of annual ecommerce sales. It's also a time when users tend to make unplanned purchases on the basis of pricing or product launches. The holiday sentiment boosts planned large value purchases too.

With that in mind, 2020 was historic for ecommerce firms by all means. As consumers were afraid of stepping out and shopped online, firms like Amazon and Flipkart got a foot in the doors of several new households. The pandemic also forced many physical retail shops to go online. 

But this year is shaping differently. With the new sellers base increasing by as much as 55% on marketplaces like Flipkart, and Flipkart-owned Myntra increasing its niche brand penetration, competition across categories has spiked. Amazon said that in the last 20 months, more than 300,000 sellers joined the marketplace, but did not reveal the latest numbers. 

“Not only are new brand sign-ups increasing, but direct-to-consumer brands are also launching new products and spending more money for visibility, as are traditional large companies in the consumer electronics and personal care space,” said an executive at a large electronics brand that sells on all marketplaces. “It’s a consumer's market.”

Two distinct trends are shaping the festive season sale this year: