To the reverberation of giant overhead fans, they circle around huge metal-covered depots, sort parcels by zip code and toss them into giant cage-like bins, circling around trolleys laden with large packages , and load the boxes onto the conveyor belt.
“Let’s rock, guys!” A male voice fades in English on the PA system.
Walmart Inc.’s Chennai unit’s scene is typical of warehouses across the country, with hundreds of thousands of employees working at a fever pitch ahead of the Diwali holiday season, which begins this month and runs through November 4. IS – India’s peak annual shopping calendar.
This year, week long festive season Amazon.com Inc. and Walmart’s Flipkart are more important than ever as they look to lift India’s retail market. This is the first Diwali since two brutal COVID outbreaks confined millions of Indians to their homes and forced them online for the first time.
Internet sales are still a fraction of India’s $1 trillion retail market, but a strong performance this season will pave the way for the US giant’s long-term success.
“It’s a big Diwali for online retail,” said Manish Tewari, Vice President, Amazon India, in an interview.
Forrester Research estimates online sales should rise 42% to $9.2 billion this season during the festival of lights, with consumers turning to e-commerce.
Over the next four to five years, online shopping could grow five-fold with half a billion Internet users by 2030, marketing trade body MMA and media agency GroupM estimated last month.
Seeing the growing demand, companies are adding employees to warehouses and delivery hubs at a rapid clip.
Flipkart added 115,000 jobs this sales season, up from 70,000 in 2020 and 50,000 in 2019. They are also recruiting unconventionally. Aiding in this effort is the launch of the so-called pink shifts, which consist exclusively of women.
At her warehouse in Chennai, 23-year-old supervisor Ramya Lakshmi N has barely 45 days at work and is already in charge of managing floors and meeting targets.
Dressed in short hair and a check shirt over black trousers, she stuns among colleagues in hair straps and a traditional salwar kameez outfit.
“We are helping India make purchases,” said Lakshmi, an MBA graduate in logistics. “Pink Changes is also creating new avenues for women in a rapidly growing industry.”
The rivalry between Amazon and Flipkart peaks during Diwali, with both offering huge discounts on everything from smartphones and sports equipment to appliances and keto foods.
During the inauspicious period of Shradh, a fortnight when Indians pray for their ancestors, offers have begun earlier than usual.
Whoever comes out on top this Diwali gains more than bragging rights. It’s early days for the digital-retail market, and both companies’ sales numbers are growing rapidly.
Importantly, investors will be watching how Amazon and Flipkart — which are preparing for one of India’s biggest IPOs — fare against domestic competition like Reliance Industries Inc.
Local contenders get many benefits as Prime Minister Narendra Modi’s government seeks to nurture domestic champions.
Amazon and Flipkart are prohibited from displaying particular products or holding inventory, and they are not allowed to own more than 51% of supermarket chains.
Arvind Singhal, president of consultancy Technopak Advisors Pvt Ltd, said the pair also risks further legislative action from the government.
Meanwhile, the likes of Reliance and Tata Group get time to catch up with US rivals while the online channel is in its infancy.
“Definitely, online is the future of retail in India,” Singhal said. “But the future is not tomorrow.”
The Confederation of All India Traders, representing lakhs of small traders, has threatened to launch protests after Diwali if the government does not bring policies to curb the online giants.
Surprised, both Amazon and Flipkart are announcing early wins. Amazon, whose tagline this year is giving away ‘boxes of happiness’ – a box of happiness – said it has signed up 60% more sellers than in 2020, resulting in record single-day sales. Amazon’s Ti, in a phone interview, said the company saw a 65% increase in orders from smaller cities and towns.
Helping to fuel the growth is voice shopping, as customers using the service have more than doubled since last Diwali, he said. Around 85% of new customers are coming from smaller cities and beyond, compared to 65% a year ago.
Flipkart, which was bought by Walmart for $16 billion in 2018, said last week’s Big Billion Days sale saw a 55% increase in new sellers compared to the previous year. Premium smartphone sales doubled compared to 2020, and 42% of these were purchased by customers in smaller cities and towns. The company sold over 200,000 iPhone 12 devices at the start of the sales period.
Both Amazon and Flipkart are expected to break Diwali records, helping consumers become more comfortable with online shopping during the pandemic.
Jitendra Miglani, a senior analyst at Forrester, said confidence in delivery and digital payments has increased and users are sticking to new buying habits.
Meanwhile, in-person shopping is taking time to rebound, even as the increase in daily infections has slowed from a May peak of around 400,000 to nearly 20,000.
“The pandemic has been a blessing in disguise,” Miglani said.
Yamuna Gopinath is one of the lakhs of people taking advantage of the Diwali bargain. Bangalore middle-school math teacher stocks up on groceries and household items on Flipkart, then picks up a OnePlus Nord 5G smartphone on Amazon. “The e-commerce rush helps buyers get the best discounts,” Gopinath said.
Bargaining can be eye-catching. Amazon is advertising up to 70% off on furniture and up to 40% off on smartphones. The Seattle giant sold an Alexa-powered Echo speaker for Rs 1,999 ($27) – less than a third of its sticker price.
Flipkart is offering up to 80% off on sunglasses and car accessories and is selling the iPhone 12 Mini for Rs 40,000, a discount of almost 20%.
Back at Flipkart’s warehouse, the Diwali frenzy has gripped everyone from sorters and packers to supervillain Lakshmi – a window into not just the Amazon-Flipkart rivalry but wider Indian consumption as well. Clothes top the list for many of her colleagues — but not hers.
“My heart rests on the iPhone 11,” Lakshmi said. “I will use a pay-now-later offer to finance this.”
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