MUMBAI: Sales continue to be an important driver of online shopping in India, shifting significant numbers of smartphones and bringing in new shoppers in lower tier cities, a new study says.

Two years ago, the government introduced rules to limit the discount-driven approach in an attempt to level the playing field between online and offline retailers by requiring any discounts, offers or inducements to come from the seller itself and not the marketplace.

That doesn’t seem to have held back the popularity of a sales-driven approach to boosting gross merchandise value (GMV) and bringing in new shoppers.

According to a report by research firm RedSeer Consulting, there was a 30% increase in average order value during sales periods in 2017, while the number of daily transactions at these times leapt 200%.

The number of monthly active shoppers rose by a third, with a total of 10m coming from Tier II cities; a further 50m online shoppers from these locations are predicted for 2018.

An indication of how this sector is developing came from the vice president of category management at Amazon India. Referring to January’s Republic Day sales, Manish Tiwary said the company had “acquired the highest number of new customers ever in one single event, outside of Diwali sales, with 85% of the new customers coming in from Tier II+ towns”.

Overall, the 30 or so sales days promoted by online shopping platforms in 2017 contributed 30% to annual GMV, the Economic Times reported.

The smartphones category registered the biggest growth in GMV, up by almost 50% year on year in 2017, as Amazon and Flipkart ran flash sales, exchange offers and created exclusive partnerships as well as offering their own brands, 10.or and Billion respectively.

These were developed out of the insights derived from smartphone ratings and reviews that customers left on the e-commerce platforms.

Sourced from Economic Times; additional content by WARC staff