E Commerce Players Set To Tussle In Online Battle Ground
Major E Commerce platforms are back with their popular festive season sale. Amazon, Flipkart, Snapdeal and other major OLS marketplaces are running lucrative offers on many popular brands.
However, what is unique this festive season is that instead of running behind the deep discounting strategies, OLS are focusing on the value added services and such as cash back, exchange and replacement. Industry experts say that strong protests from the offline channel and government’s attempts to regularize an online business is slowly what is causing this price stabilization online.
Festive Season Boon For OLS
The festive season is always a boon for E Commerce marketplaces to increase their business and grab more mindshare. At the recently concluded five-day sale, Flipkart claimed to have sold 15.5 million units. The company’s flagship Big Billion Days (BBD) sale event reportedly registered gross sales of approximately Rs 3,000 crore during the five-day event. Its nearest online rival Amazon, which sold 15 million units.
According to the report of Financial Express, the combined sales of the three e-commerce entities – Flipkart, Amazon and Snapdeal, was pegged at around Rs 6,500 crore, up 20 percent over the previous year.
In 2015, all the three major players of E Commerce players together registered sales of approximately $500-600 million during the festive period. Research firm RedSeer estimates that OLS will register transactions worth Rs 11,000-13,000 crore (US $1.7-1.9 billion) in October, driven by festive offers and discounts on their platforms.
Lucrative Offers, Attractive Ads
Lucrative offers and discounts and attention catching advertisements and publicity campaigns are major growth drivers of E Commerce majors during the festive season.
While the primary battle is undoubtedly among Amazon, Snapdeal and Flipkart, other major online portals such as Myntra, Jabong, Shopclues, eBay have introduced fascinating offers for customers. Amazon has introduced its Great Indian Sale, while its close competitor, Flipkart is offering customers the Great Diwali Sale. Both offers will be on for three days starting from October 25 midnight to October 28 and offer value for money deals on the products across the categories.
These marketplaces have also introduced attractive discounts on exclusive products. To make it easier for customers to avail of large purchases on EMI, both the E Commerce platforms have reportedly tied up with banks for schemes and options. While Amazon has tied up with State Bank of India, Flipkart has chosen Citibank and will offer cash back of up to 15 percent when customers use credit and debit cards of these two banks. Another contender Snapdeal is trying to woo consumers towards other electronic peripherals this Diwali.
OLS brands are also very aggressive on their publicity strategies and have been pouring substantial amount of investments in the print and digital advertisement. According to the report, e-retailers are expected to spend more than Rs 2,000 crore on advertisements this festive season.
Also Read: Diwali Bonanza: Brands Shower Offers On Customers
No More Deep Discounting
After an outrage of the offline channels over the predatory pricing practices of OLS, the government is now contemplating stringent rules to curb deep discounting. The government in March announced that online marketplaces and owners of foreign shopping sites can not offer discounts and that only companies and sellers on such platforms could mark down product prices. Hence, E Commerce players are trying to come up with innovative ways to offer indirect discounting benefits to customers by curtailing commissions of online sellers.
Amazon has reportedly decided to cut the commission it gets from some large and preferred sellers by 30-50 percent on the condition that the saving is passed on to consumers. Flipkart and Snapdeal are also coming up with a similar strategy, where, they plan to offer credit to sellers, equivalent to the discount offered, a practice that is common in offline trade. E Commerce companies are also getting specialized online sellers on board to cut down layers of traditional distribution and thus offer better margins. Brands are working directly with such distributors for special discount schemes, mostly for online exclusive models.
Despite of past incidents of Flash Sale fiasco, E Commerce festive sale have gained a lot of traction among customers and a large chuck of customers prefers the online purchase over the brick and mortar. With online sales growth remaining sluggish during the first half of this year, all online players are expecting the market to revive to normalcy during the Diwali festival.