Etailers moving away from deep price cuts to focus on better financials
There’s no better time for a bargain -India’s three biggest online market places tout ed discounts of as much as 80% as they launched a festive season shopping campaign amid a blitz of advertising. But the enthusiasm of early birds was dampened somewhat -there were few eye-popping deals on the latest gad the latest gadgets and fashion brands on the first day on Flipkart or Amazon India. But brands were relieved that their efforts to rein in price cuts had worked, confirming the trend of ecommerce firms moving away from extravar gant discounts. nstead they are focussing on better financials.Still, deep discounts were available on online-only and ecommerce-focused products such as those made by Micromax, Onida, BPL and Motorola, and on older models of gadgets and smartphones, said industry execu ives. A similar trend has been seen in apparel and accessories. This marked a sharp departure from last year, when the latest models of iPhone, Samsung Galaxy phones and Sony televisions were on sale. The ecommerce companies offered maximum discounts on their in-house apparel brands where margins are twice that of other clothing. “None of our fresh merchandise is on discount except old or ast-season stock,“ said J Suresh, chief executive of Arvind Lifestyle Brands, which sells brands such as Gap, US Polo, Wrangler and Calvin Klein.


He said companies were more conservative this year, ordering about 1.2 imes the normal stock for the discount period unlike last year when hey were targeting to grow sales by ive times. “The focus is surely on margins and profitability,“ Suresh said.

The chief of a leading shoe brand said deep discounting of 60-80%, which is usually offered during endof-season sales by the ecommerce irms, was missing on the first day.“The madness was not there and even was expecting good deals on nternational brands for my personal purchase where discounts were hard y 4-10%,“ he said, requesting anonymity. The absence of deep discounts on the hottest items is good news for brick and mortar retailers, who have been suffering on account of lower prices online.

Panasonic India managing director Manish Sharma, who is also president of the consumer electronics lobby group, said all big brands had advanced their Diwali promotional offers in the offline trade to boost consumer sentiment and offer a level playing field. “The e-commerce marketplaces too are in a consolidation mode and have realised it may not be healthy to continue to burn money on discounts. This year’s online Diwali sales is a healthy sign and will ensure both online and offline will co-exist,“ Sharma said.

Haier India president Eric Braganza said the company had signed pricing agreements with ecommerce marketplaces such as Flipkart to ensures that there would be no sharp price cuts on its products.

Amazon and Flipkart started their festive season sales on Tuesday while Snapdeal kicked things off on Monday. Discounts were attractive on online-exclusive smartphone brands such as Motorola, Xiaomi, Yu Yuphoria and OnePlus 2. Price cuts were also offered on baby products, general merchandise, home décor and personal care products. The sale will carry on until the end of the week.

Flipkart said there had been a surge in app downloads in anticipation of the sale.

“It’s great to see 1.6 million app installs in the last two days, which is a great indicator that India has been preparing well for The Big Billion Days,“ said Mukesh Bansal, head of commerce platform at Flipkart. The sale was off to a relatively glitch-free start. Flipkart, which was hit by glitches last year owing to heavy traffic, has staggered its app-only dis counted sales over five days, across various categories such as fashion, home appliances, electronics and books.


After Flipkart announced the October13-17 campaign, Amazon and Snapdeal announced similar exercises–a point that a company executive brought up. “Random thought: Checked out TOI. Looks like we set the dates for when others do their festival sales :)! Go BBD!,“ Flipkart chief product officer Punit Soni tweeted.

Rohit Bansal, cofounder of Snapdeal, tweeted: “Looks like India has chosen @snapdeal as the app of their choice this festive season!“ Flipkart said it “saw 25 items sold per second.“ The company said 10 lakh products were sold in the first 10 hours with 6 million visits from across the country. “This is pushing the limits, the volumes are much higher than last year,“ said Naman Sarawagi, cofounder and CEO of FindYogi, a chat-based shopping assistance app. A clearer picture is likely to emerge when the sale concludes later this week.

Snapdeal said that it sold five mobile phones every second on Monday as it racked up total sales of $100 million.Amazon India claimed that the first day of the festive sales was the biggest day in its history, four times bigger than the peak of last Diwali. Traffic from mobile was over 70% and lakhs of new customers came from cities like Aurangabad, Malappuram, Dhanbad, Kannur, Tiruchirappalli, Jamshedpur and others.

Small and medium sellers reported up to ten times more sales than their daily sales. Grocery & gourmet witnessed a three times growth in unit terms as compared to our previous biggest day and five times compared to the pre-sale period.

“We have seen an enthusiastic and energetic response from our customers through the year and in all our promotions including the first day of our Great Indian Festive Sale today,“ an Amazon India spokesperson said.


Most visitors were from cities like Bengaluru, Delhi and Chennai. Ludhiana, Lucknow and Bhopal were among the top cities from non-metros, said Flipkart, where employees have been working round the clock to keep systems stable.

Flipkart set up shuttle services for employees to be picked up and dropped and even put an ambulance and masseurs on standby.

“With over 20 million visits from across the country on the first day, the fashion sale has been a big hit amongst our customers. For electronics it will be even bigger on 15th October as we have lined up a range of smartphone launches for our customers from brands like Google, Motorola, Huawei, Intex and Micromax. All these new launches will have aggressive launch and exchange offers along with exciting bank discounts,“ a Flipkart spokesperson said.

Nearly 1.5 million shoppers bought goods worth over $100 million from Flipkart during the sale in 2014 but the site stuttered as a large number of people sought to access the site. This year’s Billion Days sale is expected to be five times in size, according to one Flipkart employee who requested anonymity.

Meanwhile, good discounts were available on older iPhones and iPads besides LED television models of LG and some apparel brands.

Source: The Economic Times


Neeraj; an entrepreneur & a visionary in the field of Railway, Defense & Automobiles, is a graduate in commerce and a Harvard Business School Alumni. He’s an expert in govt. liasoning & contracting and has an exceptional network & connections at both local as well as global level. He’s an expert in Market Strategy & Planning and has served number of overseas companies as an advisor/consultant. He takes a profound interest in upcoming startups & is very receptive towards ground-breaking ideas & innovations. He likes to brainstorm those ideas and if the values & philosophies matches; he is even ready to invest his resources, serve as a mentor or act as an incubator to futuristic businesses.

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