Flipkart's Big Billion Day: Beyond the $100 million sales numbers

We saw the ads, on television, in our newspapers: Flipkart’s Big Billion Day sale was coming on 6 October 2014 and it promised some crazy deals, with products starting at Rs 1, massive discounts, and more. But those weren’t the only ads we saw now, did we? Rival Snapdeal launched its own ad onslaught roping in television stars, including popular faces from Comedy with Kapil, and ensured that its TVCs weren’t far behind.  Amazon followed with its Mr and Mrs Verma ads.   This obsessive pre-Diwali discount bonanza was clearly visible given that both Flipkart and Snapdeal had front page ads in the Times of India. Now that the sale is over, Flipkart says that it “got a billion hits” and $100 million of GMV (gross merchandise value) sales in just 10 hours. Snapdeal too was claiming something similar, with sales worth Rs 1 crore a minute, so roughly close to Flipkart. Amazon chose not to reveal any numbers on how it did on Monday. But it wasn’t as smooth a sailing for Flipkart as they would have liked. As we had noted in this post #Flopkart jokes had flooded Twitter with users pointing out that the items they wanted were out of stock, that the discount maths didn’t quite add up and that many of them saw a service error when trying to buy goods from the website. Perhaps what was most damaging was a viral blogpost that was shared widely on social media sites like Reddit, Twitter, etc which claimed that Flipkart had falsely hiked up the price of products and claimed that these were really false discounts. Interestingly if you try to open the blogpost, you get a 504 error. The veracity of the post’s content might be hard to establish but there’s no doubt that it did cause some PR damage for Flipkart. Then some users on Twitter pointed out that the products on Flipkart were actually more expensive that the ones on Snapdeal.

Kya re Flipkart? Your MacBookAir 13" is Rs.56,490 and Snapdeal has it at Rs.49,999! http://t.co/P627azUmGX vs. http://t.co/lj91iSnqOF

— Karthik 🇮🇳 (@beastoftraal) October 6, 2014

And to make the pain of Flipkart’s prices even more apparent, there was this tweet from one user, who pointed out how the big-daddy of them all Amazon was also raining on the Flipkart parade.

Amazon just gave me a bumper 30k off on Macbook air. Lovely!

— Ashwanth (@achu17) October 6, 2014

We checked out the prices of the MacBook Air 13-inch on Flipkart and Amazon today as well. While Amazon is still offering some Rs 17k off on the laptop, the prices are back to the same for Flipkart. And yes, Amazon had also bought the domain name bigbillionday, and users who typed it in were redirected to www.amazon.in. Despite the jokes, and the complaints from users, we need to look beyond the usual Flipkart vs Amazon vs Snapdeal sales. For starters, the sales prove that e-commerce as a viable option in India is here to stay.  With gross merchandise value sales worth $100 million on Flipkart and around Rs 1 crore per minute on Snapdeal, one thing is evident that people are turning to the Internet to buy things. Electronic products like smartphones, tablets, computers are definitely the ones doing well. For instance Xiaomi claims to have put out 1.5 lakh Redmi 1S smartphones on Flipkart for the Big Billion Day sale. The phone is currently sold out and while some of the people buying the phone might have been resellers, what we do know is that 1.5 lakh units of the device were sold. For an online platform, that’s a pretty huge number for just one kind of device. We can also safely say that Tier-II and Tier-III towns are also joining in the online shopping madness. As our past interaction with Flipkart's founders had shown these towns are seeing a massive growth in categories like clothing, accessories, shoes as well. For consumers, these sales means choices galore. Given the level of competitiveness that all three websites displayed, it’s not very hard to imagine prudent users surfing all three sites browsing the prices and deals for the same one product.  The flip side of these crazy discounts is that the ones who couldn’t get their hands on a product were the ones complaining and that’s never great publicity. It’s safe to expect that given the kind of response and marketing hype we saw for this year’s sale, this could become a regular affair. We might not have Black Friday sales lines like in America, but online mega discount sales can ensure virtual queues in India. The crazy rush also explains why Flipkart’s site crashed at times for some users during the sale. But not everyone is happy about the deep discounts. The fight with the retailers is something that can’t be overlooked. As this _Firstbiz_ piece  points out Pantaloon’s Kishore Biyani was unhappy about the discounts and asked “How can Myntra sell our products at such deep discounts and hurt our brands?” Biyani said, “Laws in this country do not allow sales below cost price. This is anti-competitive. We (at Big Bazaar and other retail brands) never sell below cost price”. Myntra’s big sale is today. And they weren’t the only ones expressing unhappiness. As this ET post notes, “not all sellers have come on board to share the tab with the online retailer,” and that one senior executive of a leading consumer electronics retail chain they “did not even know that few of our listed products would get discounted.” In some cases, Flipkart is footing the bill for discounts. Evidently the sales were aimed at growth and wooing new users. How big this growth will be in the coming years remains to be seen, but for now the hype and cheer for all three sites will continue.