Diwali - The Festival of Lights And Grand Sales

Diwali is one of the most-awaited and celebrated festivals in India. Diwali marks the return of Hindu God Ram to his kingdom Ayodhya from a 14-year exile. It is a 5-day celebration. People from all over India celebrate Diwali with Diyas, lights, and grand feasts. People buy new items and clothes for Diwali celebrations to celebrate the renewal. Friends and families come together to celebrate this wonderful festival. Over the years, the exchange of gifts between them has become a part of the celebration. Other traditions include Diwali cleaning (Cleaning of house preceding Diwali), Rangoli making, and eating sweets.

These rituals and traditions boost business sales and this festival is considered one of the busiest seasons for shops. However, the major profiteers are E-commerce websites. Diwali has become the festival of lights and the festival of Grand Sales. The 2 major fish in the pond are Amazon and Flipkart.

Here are some of the facts about Diwali’s impact on E-commerce websites:

How good are Indians at Shopping 

Forrester Research has expected Indian consumers to spend almost 4.8 Billion dollars from 27th September to 29th October and 80% of the amount to be spent in the Diwali week. New regulations of India restrict websites like Flipkart and Amazon to sell exclusive products. Therefore, there is a fierce competition between E-commerce stores and retailers to cash in the maximum amount of money in this short period.

During the Diwali sales, approximately 32 million users were expected to buy things from E-commerce firms. These sales mark 10-15% of their annual sales. These sales range anywhere from a 10%-90% discount with free and same delivery options. E-commerce firms follow a loss-leading strategy to gain more customers. To ensure smooth functioning, they have to hire a magnanimous amount of temporary workers.

When you snap a deal on Diwali 

Indian E-commerce firm Snapdeal has had not one but three Diwali sales. Their sales received a boost from the festival and this year’s sales grew by 50% from last year. While we think that all this traction comes from metropolitan cities, it is actually quite opposite. Snapdeal’s 90% of orders came from non-metropolitan cities. Snapdeal also observed that a number of people from metropolitan cities are sending gifts to their loved ones back home in non-metropolitan cities. This tradition took off last year and is expected to increase his year.

Diwali’s  impact on Amazon and Flipkart

Tier 2 cities include cities like Agra, Lucknow, Jaipur, Chandigarh, and Nagpur and the rest non-metropolitan cities are tier 3 cities. Flipkart saw that in its sale- Big Billion Days, the transactions of tier 2 and tier 3 cities doubled this year while 91% of the new customers of Amazon were from these cities. If Diwali wouldn’t have taken place, these E-Commerce firms would have lost the majority of their annual profit.

 E-commerce firms hit Small Retailers

While E-commerce firms are expecting a 60% rise in sales in this period, the retail stores and small shops have been hit by these E-commerce firms. Small retailers are losing their majority portion of annual profit to behemoths like Amazon and Flipkart.

Huge firms like Amazon and Flipkart receive a large amount of foreign money support. They use subsidiaries and place very high discounts on items, which the small retailers are unable to match. Naturally, Indian shoppers prefer E-commerce firms for their cheap prices and high-quality service. Nearly 40,000 mobile shops are on the verge of closure by Diwali. Many retailers have had to close shops because of this situation. While the Commerce minister and Confederation of all India Traders (CAIT), CCI chairman Ashok Kumar Gupta spoke in favour of brick and mortar stores and retailers, The companies maintain that they aren’t doing anything wrong and are compliant to all the rules and regulations while also adding that they create jobs in India.

Even though we flock around high discounts, we should be mindful of the long term impact on the country especially, when the economy of India is at a low. Shopping from the local stores will provide you with high-quality products and also help them to maintain their businesses.

We wish you a very prosperous and Happy Diwali!

- Written by Sunidhi Shende 

- Edited by Maitreyi Mehndiratta 


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