Festive season 2021 likely to be bigger than last year
The festive season in India is one of cut-throat competition, deep discounts, and aggressive sales strategies. Estimates reveal that during the first week of the festive season in October last year, ecommerce companies raked in total sales of over $4.8 billion. This year, industry insiders and ecommerce companies expect this sales figure to rocket even higher.
For instance, apparel brandis expecting demand to soar in the coming months. In fact, the brand recorded the highest ever sales in June 2021 — an indication of the robust demand in the months to come.
“The money has moved from buying or spending on experiences to things,” says Ayushi Gudwani, Founder and CEO, FableStreet, adding that apparel has been a high growth category for the company.
Logistics playeris also gearing up for a bonanza festive period. “In terms of serving the volume, we expect at least 70-80 percent uptick over last year’s Diwali,” says Siddharth Agarwal, Vice President - Corporate Strategy and Planning, Ecom Express.
According to Siddharth, people are more optimistic this year about the festive season as compared to last year. He says that people were holding back on expenses and saving money rather than spending on discretionary purchases.
As per a report by India Brand Equity Foundation (IBEF), India’s ecommerce GMV in the festive season of 2020 was $8.3 billion – a 66 percent jump from the previous year. The industry also had a remarkable 87 percent increase in the number of users — which touched 88 million users.
Siddharth points out that the rise of social commerce platforms has helped customers who were digitally inept at making purchases on ecommerce platforms. This trend, he says, is going to lead to many new shoppers across India.
Ayushi Gudwani, Founder and CEO, FableStreet
How ecommerce companies are leveraging this demand
When it comes to aggressive discounting, industry watchers say that electronics is usually the category that sees major discounting, followed by apparel. FableStreet will not be making particular changes to its discount strategy but will be ramping up inventory and supply chain to leverage the festive rush.
“Consumers are willing to spend on the right set of clothing,” explains Ayushi, who introduced loungewear and work from home wear amid the pandemic.
But with things opening up, FableStreet is planning some category expansion to cater to the evolving needs of the consumer. The in-house workwear fashion brand is looking at a category expansion. Jewellery, accessories and fusion wear will be added to the portfolio as it is preemptive of the festive season.
To keep up with the expected festive demand, Ecom Express is preparing to build its infrastructure with more delivery centres, processing centres, and further investment in technology. It will also be onboarding more manpower to facilitate smooth operations for the predicted colossal demand. Currently, Ecom Express covers about 27,000 pin codes in the city.
“We are going to grow five to six times in less than a year,” says Ayushi, in a panel discussion with YourStory’s Daily Dispatch. To support this growth, FableStreet is also drawing up a plan to raise funds in the next six months.
Ecom Express said they are very happy with their current set of investors and won’t be looking for external capital at the moment. Earlier this year, UK-based investor CDC Group pumped in $20 million into Ecom Express. The company aims to grow year on year mirroring the growth statistics in the ecommerce industry as a whole. It is targeting a growth of at least 35-40 percent.
The Indian ecommerce industry is set to reach $99 billion by 2024, as per the IBEF report. It is expected to be growing at a 27 percent CAGR from 2019-2024, with grocery and fashion being the driving force behind the growth.
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