E-commerce players are taking innovative and aggressive steps to reap the benefit of usual surge in spending by the consumers on this festive season.
Festive season is one of the most important periods to boost sales for retailers in India as consumer spending sentiment is stronger. Industry estimates suggest that Amazon is spending at least Rs 150 crore on various marketing initiatives to lure consumers. Agarwal claimed that initiatives such as Udaan, Tatkal, Chai Cart, among others, have helped it emerge as preferred shopping destination with significant increase in sellers' base.
Flipkart is believed to be spending about Rs 30-40 crore for its annual mega sale event - BigBillionDay - as it has been taking multiple steps to cut monthly spends.Snapdeal, which has been losing market share to Amazon, is spending Rs 200-crore on media and advertising to push its brand new positioning over the next few months as it looks to regain lost market share.
Flipkart is also trying to replicate its strategy of selling mobile phones through exclusive partnerships to its white good and large appliances business. Leading the initiative is Sandeep Karwa, who earlier headed the smartphones category at the online retailer.
Flipkart has brought in brands with exclusive pacts at competitive pricing to lure buyers away from closest rival Amazon. Chinese brand Leeco, Vu, Sansui, BPL have come on board Flipkart exclusively, and are offering their entire range of products. The Bengaluru-based e-tailer, which is fiercely fighting Amazon to safeguard its number one position of the online retail market, has also inked deals with LG, Samsung, among others, to sell some of their products exclusively.
While Amazon and Flipkart (inclusive of Myntra and Jabong) are clocking Rs 2,000 crore and Rs 2,400 crore of monthly sales, respectively, Snapdeal is estimated to have registered around Rs 700 crore as of August, as TOI has reported earlier.
"India revenue is small today, but the investment is financially relevant as Amazon could be losing $500 million to $1 billion a year. Longer-term, by 2025 (we) estimate Amazon India could generate $81 billion in gross merchandize volume (20% of total international gross merchandize volume) and $2.2 billion in operating profit," noted a recent report by Bank of America Merrill Lynch.