Festivals, Sales, and GST Reductions Drive E-Tailers to Accelerate Deliveries
From all-night deliveries to AI-driven inventory management, online platforms and logistics companies are ramping up efforts to meet the soaring demand for consumer goods this festive season. With the introduction of lower GST rates on September 22, many shoppers are eager to make purchases they had previously postponed. This surge in consumer spending is prompting logistics firms to enhance their delivery capabilities, ensuring that items like electronics and fashion are delivered faster than ever.
Logistics Firms Adapt to Increased Demand
As the festive season approaches, logistics companies are adapting to the heightened demand for quick deliveries. Firms such as Delhivery and DTDC are now offering delivery times as short as 30 minutes to a few hours, depending on the location. Abhishek Chakraborty, CEO of DTDC Express, noted that this year has seen a significant uptick in demand across various categories, including electronics and fashion. He attributes this to both consumer enthusiasm and the recent GST benefits, which are expected to further stimulate spending.
The trend of premiumization during festive seasons is also evident, as consumers are likely to opt for higher-end products. While smartphones remain at an 18% GST rate, the overall savings from other tech products are encouraging buyers to upgrade. Shubham Singh from Counterpoint Research highlighted that early indicators suggest a robust start for e-commerce platforms this season.
Online Shopping vs. Brick-and-Mortar Stores
Online retailers typically outperform physical stores during festive sales, particularly in categories like large appliances. Brands often prioritize online releases due to high demand. However, experts predict that brick-and-mortar sales will also see a boost over the weekend. Satish Meena, an adviser at Datum Intelligence, emphasized that while online platforms have an advantage, traditional stores are likely to benefit from the festive rush as well.
Flipkart has introduced its quick commerce service, Minutes, which operates around the clock during sales. If demand remains strong, the company plans to integrate this service into its regular business model. Meanwhile, Amazon has reported significant growth in sales of air conditioners and dishwashers, which have benefited from GST cuts. Both Flipkart and Amazon have expanded their workforce and infrastructure to accommodate the surge in demand.
Consumer Trends and Employment Opportunities
The festive season is not only driving sales but also creating job opportunities within the logistics and retail sectors. Myntra has increased its workforce in warehouses and last-mile delivery to support its quick commerce service, MNow, which promises delivery of fashion and beauty products within 30 minutes. Similarly, BigBasket has reported a 20% increase in demand over the past week, indicating a strong consumer appetite for online shopping.
Dipanjan Banerjee, chief commercial officer at Blue Dart, noted that the combination of GST reforms, festive shopping, and mega discount events is fueling growth in e-commerce and retail. He highlighted that demand from tier-2 and tier-3 towns is outpacing that from metropolitan areas, showcasing a shift in consumer behavior as more people turn to online shopping for their festive needs.
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