Amazon’s Prime Day likely to see muted growth in India, in keeping with global trends
A week afterhosted its Prime Day sale event in the US and 15 other countries, India and a group of other Middle East and North Africa (MENA) countries including UAE, Saudi Arabia and Egypt will follow suit on July 23 and 24.
The ecommerce giant, which claims to have over 200 million Prime customers worldwide, might see muted activity due to inflation and curbs on discretionary spending by customers, according to industry experts.
The annual sale event by Amazon registered Gross Merchandise Value (GMV) sales of nearly $12 billion globally, according to multiple third-party reports for the US and other markets where the event has concluded. This is a 7.7 percent jump from 2021, where the event clocked GMV sales of $11.9 billion. GMV is a measure of the total value of goods sold by an online retailer over a specific period of time.
For the Indian market, the online retailer expects to replicate its success even as the global event’s growth reportedly stalled in 2021, as compared to the boom in 2020.
“Today, we have over a million sellers on the marketplace, and over 450,000 of them joined in the last 24 months. Prime Day 2022 is a huge opportunity for a lot of sellers to benefit, reach out to a wider audience, and accelerate their growth,” Akshay Sahi, Director, Prime and Delivery Experience at Amazon India, told YourStory.
He added that the India and MENA sale events were being held at a later date due to the Eid-al-Adha celebration.
According to Akshay, the number of Prime members is also set to increase as part of the sale event, though he did not disclose the exact number of Prime subscribers in India or the expected growth in numbers.
According to a June 2021 report by Media Partners Asia, the total number of Prime Video subscribers in India stood at 18 million.
The Prime Sale event falls in the July to September quarter annually, which records a dip in sales across retail outlets ahead of the October to December festive quarter.
“The sale events held in July and August are meant at liquidating slow-moving stocks,” says Arvind Singhal, Chairman and Managing Director of management consulting firm Technopak Advisors. He adds that while sales will continue to see an uptick, seasonality continues to play a major role.
“Typically the festive quarter accounts for 25 percent of annual sales for all retailers, including online marketplaces. In India, the numbers can go as high as 40 percent, owing to the wedding season, in addition to festivities,” says Arvind of Technopak.
Apart from smartphones where the two online marketplaces Flipkart and Amazon are the largest channels for sale, according to a report published by Counterpoint in December 2021, the spendings are likely to move towards consumer appliances, fashion, and grocery.
“Supply chain for smartphones and appliances is not a major hurdle but it is more to do with income in the hands of the consumers, which hasn’t changed in the last three years. The economy will take another year to go back to pre-COVID levels and there are early indicators for inflation easing right now,” Arvind says.
As part of the Prime Day sale, Amazon Fresh is also pushing discounts on groceries, as well as fruits and vegetables. According to a recent report titled New ecommerce in India by Redseer, grocery has been a major contributor to the growth of ecommerce in India.
Whether Amazon India’s Prime Day sale continues the global trend of shrinking growth will be monitored closely.
(Video analysis on online sales by Priya Sheth.)
(This story has been updated to make a factual change.)