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E-commerce Industry Trend Insight

Managing e-commerce logistics through the year

by admin Sunday, 30 September 2018 / Published in  September, BLOG

A typical e-commerce year starts with a relatively higher than average volume in January driven by Republic day sale events, with some spillover volumes from the Christmas/New Year sale campaigns. Volume usually fluctuates thereafter within a limited range till June, when the End of Season sales in the last week of June lead to a surge in fashion volumes. These e-commerce discount sales held in Jan and June typically last for about 3-7 days that require a ramp up manpower for a period of about 2 weeks.

The Diwali sale is typically held during Sept – Nov period; has a consistent ramp up volume across all categories on account of multiple sales held viz. Flipkart’s Big Billion Day, Amazon’s Great Indian Festival Sale. This is followed by a smaller sale across multiple players during the week of Diwali.

The volume ramp up during this sale season needs meticulous planning of resources (manpower, network, inventory, and so on), hence is quite critical for all e-commerce players to build a robust logistics foundation/structure.

E-commerce Annual Calendar

The year typically sees four main sale periods, which are:

1. December – Jan: Christmas, New Year, and Republic day Sale;
2. June – July: End of Season Sale
3. Aug: Independence day/Raksha Bandhan sale
4. Sept – Nov: Dusshera/Diwali Sale

Chart 1: Annual volume trend (blended 2017, 2018 pattern)

Season Calendar – Dusshera/Diwali sale

The largest sale of the year, by far, is the sale during the Dusshera/Diwali period, in which all major players participate. The notable sales during this period are Flipkart’s Big Billion Day sale and Amazon’s Great Indian Festival sale.

The days of Navratri constitute the peak sale period during this time, with smaller sale waves seen after Dusshera, culminating with the Dhanteras sale. .

Chart 2: Day-wise season volume (Day 0 - first day of Navratri)

Note: The chart above is based on actual trends observed in 2017 and 2018. The x-axis represents a count of days from the start of Navratri (Day 0 – first day of Navratri).

Other insights: Customer buying behavior

Average Selling Price (ASP) and Cash on Delivery (COD)

When tracking customer buying behaviour, the Average Selling Price (ASP), and the share of Cash-On-Delivery (COD) in total payments, are two useful metrics.

The sale season has typically seen an increase of ASP over the corresponding Business as Usual (BaU) period by 15-20%, and this continued in 2018, with customers opting for more expensive purchases during the sale period.

The sale period in 2018 also saw a ~3-4% reduction in the share of COD in total payments (vis-à-vis BaU this year, as well as last year’s sale), driven by increasing card/wallet penetration, and usage driven by attractive prepaid discount offers by banks and e-commerce retailers.

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