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Auto sales grow by 600% on Flipkart; Snapdeal targets $2 billion GMV in the category

21-April-2016
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Auto sales grow by 600% on Flipkart; Snapdeal targets $2 billion GMV in the category

E-commerce major Flipkart, which forayed into the automotive space a year back, will start its operation of nationwide sales of two-wheelers from TVS Motor Company next month. Currently it has put the entire range of TVS motorcycles and scooters in Bengaluru for sale on a pilot basis. Within the next three months they will start adding products from all the major two-wheeler brands.

This is not the first time that any e-commerce major has ventured into this segment. Online marketplace Snapdeal partnered with Hero MotoCorp last year and witnessed a massive sale of 100,000 motorcycles and scooters online within five months.

According to media reports, the value of vehicles sold online by the Delhi-based Hero MotoCorp is estimated at Rs 500 crore, at an average of Rs 50,000 per unit. The online sales came at a time when its offline sales were struggling. The company sells Passion Pro, Splendor Plus, Karizma and Pleasure among others on Snapdeal, which saw two-wheeler sales going up in India as a result of the trend.

“Recently we have partnered with TVS Motors, Hero, Suzuki Motors in the two-wheeler category,” says Tony Navin, Senior VP – Partnerships & Strategic Initiatives, Snapdeal.

This triggers the question of the sudden interest by e-commerce players in the two-wheeler category. Adarsh Menon, VP of Electronics and Auto, Flipkart feels that with the e-commerce industry shaping up there is a lookout among the consumers for ‘a one-stop shop for all their purchases.’ He said, “Flipkart ventured into the automobile space to enable customers to purchase their dream vehicles off the platform hassle-free. Customer experience has consistently been an integral part of our offerings and hence ensures timely delivery of automobiles purchased via the platform with the highest level of transparency in pricing.”

While explaining the potential of this category, Menon cites the February report by the Society of Indian Automobile Manufacturers (SIAM) which mentioned that 13.62 million scooters and motorcycles were sold in India between April 2015 and January 2016.

“Auto is one of Flipkart’s key focus categories for the year. We have already witnessed a 600% growth rate versus last year. Given the current growth rate, we expect to see a 2x growth in the auto accessories category and are currently targeting 2% share in the automobiles segment by the end of 2016,” Menon reasons. Flipkart had launched the automotive category in April 2015 with the sale of auto accessories on its platform.  

Snapdeal is not far behind. “We are targeting a GMV of USD 2 billion for this category in the next two years,” shares Navin.

Last year, to capitalise more on this segment, the online retailer launched Snapdeal Motors, a platform that offers its customers an integrated buying experience enabling online booking along with loan approvals within two minutes of the vehicle purchase. On this platform, customers will be able to browse through a variety of automobile options / variants, avail test drives, book online, choose from a host of easy financing options and documentation support.

“We launched Snapdeal Motors last year, bringing not just the convenience of browsing assortment online, but also to integrate online and offline channels for a seamless consumer experience. The platform has been designed to facilitate easy catalogue exploration and discoverability of products from the listed brands. Once customers have selected their preferred automobile model, they can choose dealers on the basis of proximity and estimated delivery date.  Customers can pay a nominal booking amount here and access attractive financing options as well on the platform,” Navin explains.

If this wasn’t enough, Snapdeal customers will soon have access to 18 models from off-road vehicle manufacturer, Polaris on the marketplace’s automotive platform. Flipkart has already endeavored into passenger vehicle segment with its recent partnership with Mahindra & Mahindra. “Our venture into the passenger vehicle segment began with the on-boarding of Mahindra KUV100 in January 2016. In less than three months, Mahindra received over 21,000 bookings for the KUV100, both offline and online put together. We are keen on expanding this category to include all the top notch automobile brands in the near future,” Menon shares.

Amazon, on the other hand hasn’t yet partnered with any two-wheeler manufacturer, but commenced sale of auto accessories last February, which met with positive response. “We launched our auto accessories category in February last year. Since then we have seen an extremely healthy demand from consumers for products in this category. Overall, our category has grown nearly 260% since launch. Two wheelers rule the roost with helmets and bike riding gears such as gloves and jackets seeing the maximum sale,” says the spokesperson from Amazon.

Amazon.in has witnessed an incredible growth of 460% for the category overall in just one month (15 Jan’16 to 15 Feb’16). Since January, Amazon.in, has witnessed a phenomenal growth in the demand for helmets from across Karnataka, Maharashtra and Andhra Pradesh.

Tags Flipkart TVS Motors Hero Motocorp Passion Pro Splendor Plus Karizma Suzuki Motors

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