Festive focus: E-comm players working on maximising reach in tier cities

The end of September and the beginning of October saw huge sales and offers by major e-commerce players like Amazon and Flipkart. More than 60% of customer engagement was achieved from the country’s Tier-2 and Tier-3 cities.

According to Flipkart, it recorded over 1 billion customer visits during the festive days. On the other hand, there were 35 million app downloads in the run-up to The Big Billion Days. Amazon.in also saw the single-largest day of Prime sign-ups; 1.9X higher than last year. Interestingly, Amazon and Flipkart saw the largest uptick in sales from the smaller cities, and the players are now working towards marketing the big sales in those areas as well.

“To reach out to Tier-2 and beyond cities and help customers discover the wide selection on Flipkart, more than 150 million personalized and curated WhatsApp messages were shared with Flipkart shoppers. Additionally, 10 million personalized video messages in Hindi and English were sent, featuring Alia Bhatt, addressing users by their name and sharing a sneak peek into the best of offers on fashion and lifestyle products; 38% of these customers visited the app to know more,” Flipkart has said.

Flipkart has been serving customers in remote areas like Khonsa in Arunachal Pradesh. Port Blair, Medinipur, Bankura, Puri and Bhagalpur are among the top 10 Tier-3 cities from where Flipkart’s customers shopped the most.

Manjari Singhal, Senior Director – Customer, Growth, and Events, Flipkart, said, “This Big Billion Days has already fostered immense growth opportunities for our sellers, brands, transport and kirana delivery partners, with the help of bespoke financial offerings accessible on the platform, better revenue-generating avenues for them, and expanded reach across the nation.”

Meanwhile, Amazon has continued to focus on the customer backwards approach, to enable the next 500 million customers to come online. They leveraged innovations across Voice, Video, Language, AI and Machine Learning to make Amazon accessible to hundreds of millions of new customers.

“In the first 36 hours, more than 60% of sales for Amazon Fashion came from Tier 2 and 3 cities from customer favourite brands; small and medium businesses, start-ups, artisans, and women entrepreneurs offering the largest selection of products. Amazon.in saw the single largest day of Prime sign-ups; 1.9X higher than last year with 68% coming from Tier 2 and 3 cities,” Noor Patel, Vice President, Amazon India, told e4m.

Amazon also levied a number of marketing strategies to lure customers to its biggest sale of the year. As a part of the Amazon Great Indian Festival 2022, Amazon India introduced the Diamonds festive rewards program. A one-time “Bonus Diamonds” was credited to all customers basis their past shopping on Amazon.in. "Prime Extra Bonus Diamonds" was credited to Prime Customers for their shopping during Kickstarter Deals days. Of the customers redeeming their Diamonds, 50% have redeemed for offers and rewards.

Sharing insights on the festive season, Patel said, “This year’s festive season will be a bit more special to us as we return closer to normalcy. We look forward to welcoming our customers to the marketplace and enjoying the festivities. Amazon Great India Festival will offer customers the option to shop from India’s largest selection across electronics, grocery, fashion and beauty, everyday essentials, and more. This festive season we will continue to maximize seller and partner success and deliver customer satisfaction across the country.  We continue to invest in building a seamless consumer experience and to empower Indian SMBs with digital transformation and infrastructure helping them reach all serviceable pin codes in the country.”

Karan Taurani of Elara Capital shared more insights into the trend. "If you look at penetration numbers of the online retail market or the e-commerce market in India, it is very small, just 12% to 14%. And if you look at global countries, this penetration number goes up to 30% for markets like the U.S. and 40% in markets like China. So, I think there's a huge opportunity to penetrate further in the Indian markets also. When these companies were launched the entire focus earlier was only on metro cities, they would get a large portion of their GMV or the entire sales. But slowly now, they are expanding very aggressively towards the tier two and tier three market."

"There have been very encouraging signs because even their online penetration is increasing phenomenally over the years. Because people have been open to online shopping, a lot of things have happened. People moving online and having access to UPI have changed online shopping demand. There are also a lot of premium brands, which are there in various categories of retail, but may not have stores in the smaller markets. Consumers look for these brands online as the retail store is not accessible."