Justin Liu

With holidays comes shopping and with shopping comes opportunities. Though not as widely celebrated in America, Diwali is one of the largest festivals in South Asia particularly India. Occurring every year in October/November, Diwali is celebrated by millions of Indians and symbolizes the the triumph of light over darkness. Over a five-day period, families get together, share food and sweets, give gifts to relatives and friends, and set off fireworks.

India’s e-Commerce market

India’s booming digital industry and ecommerce markets have created massive opportunities for retailers and other firms to take advantage of this festival with new deals and sales. India’s e-Commerce market is expected to grow at a 30% compound annual growth rate for gross merchandise value to be worth $200 billion by 2026. In addition, Indian online shoppers will grow from 60 million (14% of the internet user base) in 2016 to over 50% by 2026.

In terms of e-Commerce, electronics is currently the leading product category, accounting for $4.9 billion market share with fashion at a close second, accounting for $4.8 billion. However, by 2020, fashion is expected to overtake electronics valued at $11 billion and $8.2 billion respectively. Furthermore, the majority of Indian e-Commerce shoppers are primarily male and in their 20s. (See Exhibit 1 below).


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Exhibit 1: Indian e-Commerce users by Age Group and Gender in 2016

Note: “User” represents the number of active paying customers of the selected market (e-Commerce market) in millions in 2016.

Diwali and the Big 2

Diwali has been a major source of success for buyers and sellers over the past 3 years, as sales have increased 1.5x year over year during this five-day period. Amazon and Flipkart, the two biggest e-Commerce retailers, have successfully used this special time of the year to create new deals and offers for consumers. Amazon registered close to 400% increase in new customers daily, and sellers were rewarded with 8-10x sales for their daily orders. Similarly Flipkart has been able to achieve almost 58% of the market share during the first five days of the sale period, which stood at Rs 9,000 crore. Flipkart has further claimed that it was able to grow sales in every major category on its platform — smartphones by 5X, large appliances by 10X, fashion and home by 4X, and electronics by 7X during this festive time.

What may be important for companies is to understand how Indian shoppers are purchasing these products. A survey done by Regalix finds that eight in ten Indian young adults use their smartphones for shopping. Consistent with the statistics about e-Commerce, this means that most consumers during Diwali (and even outside of Diwali) are purchasing on their smartphones. While the study notes that making purchases is still comparatively low, it is clear that people are spending more time browsing through stores online.

Given that India has just recently overtaken the United States and is now the second largest smartphone market in the world, buying affordable smartphones is becoming less of an issue. Instead, making sure that individuals have the ability to access content on the Web without burdening them with high data costs will allow them to browse freely. For example, mCent Browser allows individuals to surf the web and shop online while earning free mobile recharge. This means that people can stay on their favorite sites longer, shop for more products, and spend more time online.

How can businesses take advantage?

1) Be aware of cultural practices - Being knowledgeable of your user base and understanding at what times of the year they are likely to make a purchase can increase your chances of attracting new and returning buyers. For those with primarily Indian users, harnessing the buying force of festivals like Diwali by creating new deals and specialized content can bring in more sales and revenue. For others, look into what traditions and dates are special to them.. and aim to make that a success.

2) Understand the digital landscape - Living in a digitized world has changed the way we engage with our products and what our needs are. For example, as BCG writes, Practo began as a cloud-based software-as-a-service provider for doctors, but now it also functions as an online marketplace for doctors and patients. It serves as an appointment-making service for patients and provides doctors with the data they need to better manage their patient base and their practices. By understanding how the digital landscape is changing, you can reach new users and create new marketplaces especially valuable during festivals or other seasonal times when demand is high.

3) Partner Up - Power in numbers. Partnering up and understanding how your solution or product fits into the market can create better and clearer experiences for the users. But not only users, as talked above, sellers who partnered with Amazon saw significant increases in their own sales during Diwali. Using different services can enhance your product and make it more attractive than if it were to stand on its own.