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October 4, 2016
Promit Mukherjee and Supantha Mukherjee, Reuters/Yahoo
Mumbai, 4 October 2016
India’s
two largest e-commerce players are looking to use the country’s biggest
festive sales season this week to bolster their valuations as they seek
fresh capital and look to fend off Amazon’s growing inroads into the
domestic market.
For India’s Flipkart and Snapdeal, strong sales
during India’s equivalent of the U.S. Black Friday sales could give
both companies some leverage in their current push for investment.
With
private equity money flows drying up and Amazon.com pledging $5 billion
investment to gain ground in India, local e-commerce vendors will be
looking to use this season’s numbers to show investors their ability to
drive sales.
Flipkart is currently in talks with retail giant
Wal-Mart Stores and a strong showing of sales during this week could
give it more negotiating leverage. Snapdeal is also preparing to raise
fresh capital to defend its turf.
The high stakes battle between
Flipkart’s Big Billion Day sales bonanza, Amazon’s Great Indian
Festival sale and Snapdeal’s own initiative dubbed the Unbox Diwali
Sale, means employees at all three players are working marathon hours
to meet stiff sales targets.
“Our teams are working around the
clock during Big Billion Days,” said a spokesperson for Flipkart,
adding that many are camping out in office for the week, and working
14-18 hour days in a bid to keep up with frenzied demand.
All
three companies say their sales seasons have so far been successful,
but did not comment on how the sales momentum is stacking up against
their own internal targets.
Flipkart says it sold 2.25 million units in the first 12 hours of its 5-day sale, which kicked off on Sunday.
Its
closest competitor Amazon India said it sold 1.5 million units in the
first 12 hours of its sale that began on Saturday. Amazon said its
first day of sales was three times higher than the corresponding first
day sales last year while second day sales were five times higher.
Snapdeal
said more than 2 million users logged in on the first hour of its
sales, leading to more than 180 orders per second at launch.
“With
companies under pressure to make money, they don’t want to let the
opportunity go to a competitor…but you can’t keep burning cash by
offering huge discounts,” said Devangshu Dutta, chief executive of
retail consultancy Third Eyesight.
(Published in Yahoo)
