Mumbai: With the festival season fast approaching, the battle lines are drawn for capturing the mindshare of customers, more so with the big online retailers such as Amazon and Flipkart who are offering freebies to their partners in the home of attracting more traction from this ever-growing community.
Even as the online retailers are chalking out strategies to lure more sellers to their portals in order to improve the product range and provide much needed price versatility on their platforms, the action has also picked up on the traditional channel front with several vendors and distributors readying new offers to lure the buyers.
The online retailers are coming out with new strategies to maximize their market share through new and diverse strategies ranging from financial incentives to sellers, additional discounts on top of that and faster consumer connects.
Deals for sellers
The attempt is to offer incentives to sellers so that they connect better with customers and enhance the variety of their offerings on the e-commerce platform. Amazon wants its top-200 sellers to splurge at least three times more than their monthly average on advertising and promotions. This way they hope to attract more customers, thus helping Amazon to enhance revenues and providing the sellers more recognition amongst online consumers.
On the other hand, its direct competitor Flipkart is asking sellers to offer additional discounts on the list prices across random days in September in a bid to ensure that product rates aren’t jacked up just before the Big Billion Day – the day the company boasts of recording highest single-day revenues. In addition, they have also created an incentive structure to push sellers, promising to reward over 2000 of them across cities and categories. Media reports suggested that the top-100 sellers would be given additional incentives to the tune of Rs.50 Lacs. The evaluation would be done based on number of units sold and gross merchandise value.
The Attraction Game
In addition, both companies are doing all that they can to get more sellers on their platforms, given that more sellers would automatically mean more sales and a wider assortment of products that can attract the buyers. The online retailers are banking on the favorable mood among shoppers to buy online given the larger variety, better prices and possibly better quality and after sales.
These companies are not only helping sellers list their products online and develop pricing strategies, they are also ramping up financial services for sellers, increasing warehousing capacity, and unveiling technology platforms that serve as one-stop shops for all merchant requirements.
Strategies for attracting sellers
Both Flipkart and Amazon are playing an equal game. Since Indian consumers are more inclined to buy smartphones, electronic appliances during Diwali both have increased their stocks of smartphones and consumer electronics three-to-five-fold to leverage a segment that generates the most sales for them and for this sellers are attracting towards the tie-up with e-commerce companies along with selling spree with online.
To ensure that sellers get maximum benefit from the festive season, Amazon and Flipkart have aimed at ensuring that discounts are at similar levels as last year, both have negotiated additional 8-10% lower rates with online-only brands and models and have cut the commission payable by large and preferred sellers.
Flipkart, Amazon along with other startups, spent Rs 2,000 crore between September and December last year, with superstars Aamir Khan and Shah Rukh Khan fronting the brands. Thus sellers believe when there are big faces include there is assurance thus like consumers small sellers are attracted to sell their products through online marketplace.