MUMBAI: From all-night deliveries and hiring more delivery staff to AI-led inventory planning and additional storage facilities, online platforms and logistics companies are pulling out all stops to get you your new phone or that pair of jeans in evershrinking timeframes.
Festive season has always been about demand rush but this time, the shopping list has become bigger as many consumers deferred purchases to avail lower GST rates, which came into effect on Sept 22, the first day of Navratri.
Keeping up with the quick commerce trend, logistics firms such as Delhivery and DTDC are fulfilling deliveries in 30 minutes to a few hours or on the same day (depending on locations). “This year, we are witnessing stronger demand across categories like electronics, fashion, lifestyle and gifting coupled with rising expectations of faster deliveries. We also expect demand tailwinds owing to additional consumer spending expected from the GST benefits,” Abhishek Chakraborty, CEO at DTDC Express, told TOI .
Households typically tend to splurge during festivities and premiumisation has been a recurring festive trend, but given that the GST cuts are estimated to translate into more savings for consumers, the industry is hoping that all categories (irrespective of whether GST rates on them has been slashed or not) will get a boost.
More people are likely to go for upgrades and premium offerings. “Even though smartphones didn’t get a direct GST cut and remain in the 18% slab, savings on other tech products and a lift in consumer sentiment are giving buyers more room to spend and confidence to upgrade. Early insights indicate a strong start for e-commerce platforms,” said Shubham Singh of Counterpoint Research.
Although online players tend to have an edge over offline stores during festive sales, especially in case of categories such as large appliances (brands tend to push newer models online due to high demand), sales at brickand-mortar stores are also expected to pick up over the weekend, said Satish Meena, adviser at market research firm Datum Intelligence.
Flipkart’s quick commerce service Minutes is delivering all day and night during its sale with a plan to make it a part of its business strategy for good if there’s enough demand on usual days. Overall, Flipkart is seeing a double-digit surge in demand, said Pratik Shetty, VP, growth and marketing.
On Amazon, ACs and dishwashers that have seen GST cuts are seeing double-digit yo-y growth, said Amazon India VP Saurabh Srivastava. Both Flipkart and Amazon have hired more people for the season and expanded infra to cater to the high demand.
“We are seeing strong growth in e-commerce and retail, driven by GST reforms, festive shopping, mega discount days and gifting with demand from tier-2 and -3 towns outpacing metros,” said Dipanjan Banerjee, chief commercial officer at Blue Dart.
Myntra has created additional employment opportunities in the warehouse and last mile to just cater to the demand coming in for its quick commerce offering MNow which delivers fashion and beauty products in durations starting 30 minutes.
“We have already seen a 20% growth in demand over the last two days compared to the same period last week,” said Seshu Tirumala, chief buying and merchandising officer at BigBasket.
By easing the cost of essentials and festive purchases, GST reforms are boosting consumption across the board, said Devendra Meel, chief business officer at Zepto which expects consumer momentum to further pick up going ahead.
The appliance business of Godrej Enterprises Group is targeting an overall 40% growth in festive sales over last year. Fashion brand Snitch expects premium products to grow at nearly twice the rate of mass offerings on online platforms driven by younger consumers upgrading their festive wardrobes and gifting choices, said founder Siddharth Dungarwal. In FMCG, larger packs are expected to drive demand as consumers will tap into higher savings to spend more, said Angshu Mallick, MD & CEO at AWL Agri Business.
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