70% of new customers from tier II & III towns: Amazon

After a year of tepid online retail sales, e-tailers like Flipkart, Amazon and Snapdeal witnessed a wave of consumers flocking to their platforms as the much-publicised annual festive season sale kicked off over the weekend.

Interestingly, a significant chunk of the new online shoppers is reported to have come from smaller towns in states like Sikkim, Tripura and the Andaman and Nicobar Islands. These towns are a potentially huge market that online retailers are eyeing to expand the overall e-commerce pie, which has largely failed to grow over the past year. For the Seattle-based Amazon, traffic from tier II and tier III towns increased 17 times compared with last year indicative of how discounting has aided the entry of new buyers. The top six-eight cities typically contribute 90% of sales for all the consumer inter net players, leaving a yawning gap between these markets and the still largely untapped smaller towns.

Manish Tiwary, VP, catego ry management at Amazon India, said, "We have seen a five fold growth in new customer ac quisition and 70% of them ca me from tier II & III towns."

While Flipkart and Snapdea are still to detail the growth in number of shoppers from smal ler towns, Shopclues claimed to have notched up double of the business from last year with a significant rise in traffic co ming from users in tier II cities.

A Google trends report shared by Shopclues, which positions itself as targeting markets outside of metros, said these cus tomers searched for "online shopping" in the run up to the annual sale event. "Every consumer is a deal seeker and during such events it is likely that users from smaller towns will come to these sites. A lot of it is channeled by rising smartphone penetration," said Arvind K Singhal ,chairman at Technopak, retail advisory firm.

E-tailer Flipkart, which began its annual Big Billion Days sale on Sunday , claimed to have sold half a million units within the first hour of the event. Amazon, which started its sale on Saturday, said it registered a billion hits on the first day, clocking 1.5 million units in the first 12 hours. Delhi-based Snapdeal claimed it was getting 180 orders per second in the first half and it ended up with 11 lakh buyers purchasing on its platform in the first 16 hours, registering a sixfold growth in sales volume.

"We have seen a three-time growth on day one compared with last year. The trend is that we are outpacing Saturday's sale on Sunday which is unusual because traditionally sales are lower on day two of most sale events," Tiwary said, adding that smartphones have been the biggest grosser for Amazon. Television sales, usually most popular during the festive season, grew 25 times on the back of exclusive partnerships with the likes of Sanyo.

For Flipkart, which is locked in a battle with Amazon for the leadership position, the number of large LED TVs sold in six hours was higher than the total number of TVs sold during The Big Billion Days last year. The Flipkart-owned Myntra saw its revenues increasing three times in the first hour compared with last year . "What makes it special is that the number of units sold in the first six hours of sale surpassed the total units sold in a day during the first day of Big Billion Days in 2015," said Kalyan Krishnamurthy, head, category design organisation, Flipkart. Both Flipkart and Amazon are investing aggressively to garner as much market share during the annual sale event on the back of discounts and the promise of faster services and better user experience.