Flipkart records $100 million sales on Big Billion Day, but at what price?

Yesterday was a big day for Flipkart. Dubbed “Big Billion Day”, Flipkart aimed for record merchandise sales as part of a massive discount blitz not unlike the US’s Cyber Monday. As expected, by the end of the day, Flipkart co-founders Sachin Bansal and Binny Bansal declared it a roaring success. “We have created history in Indian ecommerce…We got a billion hits on our site today and achieved our 24-hour sales target of US$100 million in GMV (gross merchandise value) in just 10 hours,” they announced.

In March, Flipkart announced surpassing US$1 billion in GMV for the first time, a full year earlier than originally projected and seven years after it first launched.

Ecommerce marketplaces use the term Gross merchandise value or GMV as a measure because their revenue is actually the commission amount from sellers. GMV is the total value of merchandise sold over a given period of time.

In this case, it’s not clear whether the sales price taken into account to arrive at the $100 million GMV is the discounted price or marked price. “Most ecommerce players will calculate GMV based on the net prices the items are sold at (including discount). Having said that, it’s always best to reconfirm this every time someone gives this number,” says Siddharth Talwar, partner at venture capital firm Lightbox.

The Indian ecommerce leader had advertised its discounts heavily, geared up the tech team to accommodate a big spike in traffic, and got its sellers ready as well for yesterday’s sale. But tom-toming about the “Big Billion Day” not only piqued the curiosity of online shoppers but also gave competitors and vigilantes time to ready their arsenal.

When Amazon founder Jeff Bezos visited India last week, Flipkart’s huge billboards at the Bangalore airport, roads, and streets, advertising the “Big Billion Day”, greeted him. Bezos, in turn, grabbed eye-balls when he, in an Indian attire, got on top of a colorful lorry with a US$2 billion cheque for Amazon India.

Snapdeal rubbed shoulders with Flipkart on India’s leading national newspaper The Times of India with a tongue-in-cheek ad.

But competitors were not the only ones gunning for Flipkart’s big day. Tech in Asia reported yesterday about how social media in India was flooding with furious responses from customers who felt cheated by Flipkart. Customers accused the company of hiking the prices for certain items, then offering huge discounts on them. For instance, a 64 GB pen drive was priced at INR 49,999 (US$813), and offered at a 95 percent discount for INR 2,229 (US$36).

Patient and experienced shoppers, well versed with the principle of caveat emptor, were able to sift through the offers and find some of genuine value to them. But many felt frustrated and even gypped. A number of great-sounding deals were either out of stock when you clicked on them, or you got an ‘internal server error’ message. The Flipkart founders maintain, “our technology team has been dedicated towards addressing errors and providing constant support to accommodate the largest scale of traffic and customer visits e-commerce has witnessed across the country. Our teams and sellers worked days and nights to make this sale a success.”