Indian e-commerce figures need fact check

E-commerce is the biggest Indian media obsession after Prime Minister Narendra Modi now. Both for celebratory reasons among the world’s largest urbanizing population.

Yesterday, the local e-commerce leader Flipkart’s #BigBillionDay sale kicked up an unlikely storm on social media. The 30-something co-founders of Flipkart, Sachin and Binny Bansal, saw their brand being ruthlessly trolled. What started on Twitter and Facebook soon became an avalanche of jokes on Whatsapp and text messages.

Stock outs, server crashes and order cancellations infuriated several consumers who warmed up to online retailing mostly due to the ‘Flipkart experience’. It appeared that the company had over pitched the #BigBillionDay story. The consumer backlash was troubling for a sector still in the pre-teens.

A day later, the mainstream media reaction was largely disconnected from the social media fury. It lapped up numbers published by Flipkart — 1 billion hits, $100M sales in 10 hours — without questioning.  About 20 lakh transactions mopped up Rs 600 crore, at an average Rs 3000 per purchase.

Rivals Snapdeal and Amazon showed up with equally incredible claims. Snapdeal co-founder Kunal Bahl was quoted as saying the e-tailer sold merchandise worth Rs 1 crore per minute.

How are these figures stacking up? Consider this: India has about 250 million internet users with about 10% of them being transacting customers. It must have been a mind-blowing frenzy on the #BigBillionDay. Still, these numbers need better scrutiny, or a better perspective at least.

Try juxtaposing 1 billion hits on Flipkart website with the size of white-collar work force in India, or start asking how many SKUs in electronics (so called high-value items) were sold.

Media needs to ask questions even in its worst moments of trance. It’s time to get real about the e-commerce industry. What’s the average purchase value? How does it tally with the Chinese consumers buying online?

There could be some redeeming answers here. Last November, Alibaba’s #Single’sDay sale in China raked in $6 billion one day. China has around 650 million internet users spending more than 10,000 yuan to shop online annually. A strong consensus suggests that China has a significantly higher ratio of transacting internet users, notorious for online shopping addiction.

It’s time that business media sought better data, and not opaque numbers — even if it meant snapping its honeymoon reporting. An obsession can become a nightmare — in business and in politics.



2 Responses

  1. Good to see someone writing about it. While I am a big fan of FK & Amazon and truly appreciate the effort they have put in, I do not agree with the numbers quoted by FK & Snapdeal.
    FK is claiming 1.5mn orders which means an average order size of Rs.4000 which is highly improbable considering the best deals (over 50% off) were on products in the range of 1-2k. Rest all were good deals but not spectacular for suddenly 1.5mn people to start shopping. Also all the spectacular deals on expensive products (4k range) got over soon so quantity was limited.
    Also Snapdeal claimed 1cr a minute and everyone conveniently multiplied it by minutes & hours to arrive at a number. I think 1cr a minute could have the peak and not necessarily a norm throughout the day.

    • Thank you for the comment. E-commerce can do better with transparency in numbers. While its early days for the sector, a valuation driven biz like this needs better understanding. Nobody is doubting the enormous market potential but hype can pull us ahead of reality.

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