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An insight into Diwali 2020

2020 has been full of surprises. The Indian economy had to take a step back and re-evaluate their approach for the year. All the sales and marketing strategies were out of the door. Thanks to the lockdown, India experienced a slowdown like never before. People were forced to stay indoors. Shops and factories, alike, were shut down. While some businesses flourished during the lockdown, the majority were facing foreclosure. This of course also affected the spending behavior but only offline. People were compelled to explore the online shopping universe. eCommerce giants like Amazon and Flipkart took advantage of this change in behavior and looked at advancing their sales. With an increase in online sales, many offline brands created their online presence, whether on their own or on the various eCommerce platforms. While brands did see steady sales online, it was futile to expect a rise in the sales. The strategy was to play safe and make sure that the products are moving out. Brands invested very little to no money in marketing. All in all a very gloom state to be in.

Come October 2020 and the hopes of brands and business owners are risen. October marked the start of the festive season in India. With Navratri at the beginning of October, followed by Diwali at the end of the month, the Indian economy was geared up for a massive festive season in terms of spends. In addition to exuberance and nostalgia, Diwali in India is also known for incessant shopping deals and retail extravagance. Consumers are eager to spend on the festivities given they did not get a chance to shop for the last 7-8 months. Fear of COVID-19 and the habit developed over the past 10 months has resulted in the highest usage of eCommerce apps and websites in the last 3 years.

New Geographies

Apart from the usual shoppers from Tier 1 cities, this Diwali also witnessed increased eCommerce engagement from the Tier 2 and 3 cities and towns as well. eCommerce platforms that anticipated this demand and prepared for it, had an added advantage over other platforms. As per research, the online shopper count from non-Tier 1 cities was in the range of 45 to 50 Mn users.

Festive Sales 2020

India’s eCommerce festive sales touched $4 Bn in 2020. As compared to 2014, eCommerce festive sales increased by 23 times in 2020! eCommerce has been steadily strengthening its hold on the Indian market. Tier 2 and 3 cities and towns took comparatively lesser time to get a hang of eCommerce as compared to the tier 1 cities. Given this trend, India’s online retail market is estimated to grow by 33% by 2023.


Consumer electronics dominated the festive season sales with securing 51% of the total sales in the month of October 2020. This year has been exceptionally good to the consumer electronics industry. We cannot discount the efforts taken by the electronics to capture the eCommerce market. In the past years, smartphones have been among the most preferred online electronic products. The same has been the case even this festive season. The smartphone category alone contributed 34% to the total online festival sales this year, which is double the combined sales for other consumer electronics products. (source: Inc24plus)

Attractive offers will increase sales

Corona outbreaks continue to spread rapidly, including in India, which has evidently affected the business. After a long waiting period, traders geared up for the festive season, especially Diwali. Meanwhile, e-commerce giant Amazon and Flipkart are offering attractive offers to customers to increase their sales. Many eCommerce platforms are following the footsteps of Amazon and Flipkart when it comes to marketing and sales strategies. One such strategy is to hold special once-a-year sales where these platforms offer huge discounts and other special offers. These include Amazon's Great Indian Shopping Festival and Flipkart's Big Billion Days Sale offers.

According to the report of Redseer, sales of up to $ 4 billion (about 30 thousand crore rupees) has been achieved in the festive sale event.


Online shopping is quite evidently not the same as offline shopping. The factors that influence consumer buying decisions are different. Brands need to predict the behaviour and offer products that delight the consumer. The following behaviour dominated the buying decision for eCommerce consumers:

  1. Value for money continues to be the biggest sales driver for ecommerce brands in India. This indicates that discounts and lower prices play a pivotal role in driving customer intentions towards a particular ecommerce brand in India, which has been the case for years now. It does not come as a surprise that discounts and pricing outweigh product quality for Indian festive sale shoppers. eCommerce players have had to furnish big discounts to acquire customers despite high operational costs during the 2020 festive season.

  2. In addition to value for money, another major category driver in the Indian ecommerce market is customer service. Superior customer service can play a pivotal role in improving customer retention and help ecommerce companies breakthrough in terms of market share as evidenced by our analysis of the customer sentiment. Overall, one could say that the pandemic has given Indian ecommerce a push beyond the explored territories to look for avenues to create customer loyalty. Indian ecommerce players fail customer service tests in festive sales. Indian ecommerce consumers had largely negative reviews of service experience and refunds during the 2020 festive sale season.

  3. With the growing demand for online shopping, established brands are no more relying only on their own supply chain. They are partnering with the eCommerce platforms’ supply chain as an alternative. Brands are tying up exclusively with particular eCommerce platforms to sell or even launch their products. Some examples of exclusive partnerships include— OnePlus with Amazon, Future Retail with Amazon, Authentic Brands (Nautica India) partnership with Flipkart and others. Such exclusive or limited-time deals are seen as a competitive edge in the ecommerce game. Besides discounts, this is another way to create loyalty.

This validates the point that brands expect superior customer support and feedback mechanisms, which ecommerce marketplaces are trailing at, as seen in the recent performance of Amazon and Flipkart. As online shopping and selling mature in the Indian market, such limited-time or exclusive partnerships may be the key to creating more loyal eCommerce consumers, and it might even be a gateway to profitability.

New job opportunities

Anticipating and preparing for a much greater than average sales this festive season, e-commerce companies are offering millions of jobs. Amazon announced that it will appoint one lakh people at the back end to fulfill their operations requirement. According to the company, these jobs will be temporary and full time. The aim is to help in packing and completing the order in less time. Amazon reported that 100 new warehouses, package centers and other facility centers are opening this month.

Flipkart is also planning to hire 70 thousand people to meet the growing trend of online shopping and fulfill orders on time. Actually, the company has started preparing for its annual Big Billion Days Sale.

Apart from this, E-Com Express, a company providing logistics solutions, is considering providing 30 thousand temporary jobs in the next few days. This preparation is being done in view of increasing demand of e-commerce companies during the festive season. Earlier, the company hired 7500 people.

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