Amazon India pins hope on expanded same-day deliveries to drive Prime Day sale

Ecommerce platform Amazon India's upcoming flagship sale for its Prime subscribers will focus on driving GMV (Gross Merchandise Value) to the platform rather than pulling a volume game, believe industry experts. They predict electronics and smartphones will continue to be top categories for the Prime Day sale—scheduled to be held on July 15 and 16 in India—as Amazon, along with other ecommerce platforms, grapple with reduced marketing spends from brands. 

The sale event will see over 45,000 new product launches from 400 brands across smartphones, fashion and accessories categories, as well as over 2,000 new product launches from small and medium businesses, said an Amazon India executive. 

“For Prime Day, we are focused on strengthening our network. We have invested in infrastructure, both in terms of buildings and transportation,” says Abhinav Singh, Vice President of Customer Fulfilment, Supply Chain and Amazon Transportation Services at Amazon India. 

"From Prime Day 2022 to now, we have continued to focus on our same-day delivery programme and expanded our coverage to 21 more cities versus 2022," he adds.

The same-day delivery option is now available across 52 cities and a large percentage of customers were expected to receive their purchases on the same or the next day. 

“We have opened 21 buildings fulfilling the same-day delivery network from Prime Day 2022 till now. We are also focusing on expanding our fresh grocery network,” adds Singh. 

Many third-party fulfilment services are also expecting a boom in business.

“Prime Day sales typically cater to a stable cohort of customers, with as much as 60% of orders being pre-paid. We expect a jump of nearly 25% in volume terms for the sale days,” says a senior executive at a third-party logistics company on the condition of anonymity. 

Also Read

Amazon earnings beat estimate despite slowdown in AWS sales

According to a September 2022 report by research and brokerage firm Bernstein, the total number of Prime subscribers in India was estimated to be five million. Earlier this year, Amazon increased the price for its monthly and quarterly Prime subscription plans in India, keeping the price of the annual pricing unchanged at Rs 1,499.

The ecommerce major also introduced a pared-down annual subscription plan—Amazon Prime Lite—for value-conscious customers, and a mobile-only plan for its OTT streaming service for the Indian market. 

“For many apparel-focused platforms, the timing of the current sale coincides with End of Season Sales across the retail market in India,” Rishav Jain, Managing Director, Consumer and Retail Lead at global professional services firm Alvarez & Marsal.

He added that overall marketing spends had—by and large—reduced across horizontal and vertical ecommerce platforms in 2023 as compared to 2022, to reduce burns.

“The impact of reduced marketing spends has been visible, with fewer or no celebrity endorsements this year,” says an ecommerce analyst on condition of anonymity. He adds that brands prefer to onboard social media influencers to create a buzz rather than opting for celebrity endorsements. 

Globally, Amazon is focused on cutting costs and has been shutting down unprofitable verticals, including education, food delivery and other verticals, in India since November 2022. The company has also resorted to layoffs to pare down employee costs. 

With a positive customer sentiment and growth in ecommerce sales, according to research platform Redseer Strategy Consultants as of March 2023, the sale event will set the benchmark for the upcoming festive season sales online. 

The story was updated to reflect correction in a quote.