It seems after the India ecommerce giant Flipkart failed miserably making lofty promises of the Big Billion Day all other ecommerce players including the Global E-retail giant Amazon (AMZN, Financial) is treading the festive sales with extra precaution. Flipkart is still grappling under the effect of what happened on the D day and still reaping the ire of customers.
To avoid any such situation Amazon began its Diwali Bumper sale with a wise disclaimer attached to its ads which said across its full-page print ads that offers would be valid on select brands, products and variants and only till stocks last. This was the missing part in Flipkart’s campaign which hit back so hard that it broke the Flipkart patronage to shudders.
Let us take a look at how ecommerce a fairly new industry in India is working out their steps ahead after taking a lesson from the Big Billion Day disaster.
Ecommerce Route Re-planning in India
The warning message ‘offer till stock lasts’, usually seen across all offline sales, was missing during the Flipkart mega sale and led to huge heartburn among shoppers as mouthwatering deals were over within minutes of the Flipkart sale beginning at 8 am on 6th October. Flipkart is still reeling under the impact of irate customers it generated on that fateful day and its spokesperson said recently in a press release that the e-commerce giant is minimizing cancellations of deliveries. Also, there is no mention of the mega sale today on Flipkart even as rivals continue to speak of mega offers and deep discounts. The beating seems to have taken a heavy toll on Flipkart due to which it is keeping out of the mega sale events. Amazon on the other hand has again proved that it is the father of ecommerce with display of mega sales event but has wisely attached the stock lasting disclaimer setting the expectation clear with the consumers in the very beginning.
Snapdeal another prominent Indian E-retailer also again resorted to full page newspaper ads this morning, using the Twitter hashtag #checksnapdealtoday to say that customers should not forget to check out deals on their site. But like the cautious tone adopted by Amazon and Flipkart, it did not say what the deals were on its site.
The current Amazon deals are much more logical and reasonable than those castles in the air deals on Flipkart. On festive season bestselling items like laptops and mobile phones, Amazon is offering flat 20-30 percent discounts unlike the earlier frenzy where tablets on Flipkart were on offer for one tenth of their original price and some popular mobile phones were put on offer with a 40% discount on the sticker price, considering those brands of mobile phones it seemed near impossible to sport a discount of such high percentage. Some deep discounts are being advertised on the site but they seem to be for specific items for a limited period. Though a buzz in the market says that Amazon website crashed around 7 am, when the sale began but Amazon spokesperson dismissed the news as false and said that Amazon has advertised what is possible and looks forward to deliver what it has promised thus reinforcing the fact that Amazon in India is not just an ecommerce bubble but here to stay for a long term.
The note of caution as issued by Amazon should also help settle some dust of the war between the offline retailers and online retail gamut – the ecommerce segment have been receiving flak from offline retailers who have alleged that their brands were sold on Flipkart at prices below cost.
Media reports suggest that consumer electronics honchos had issued directives to ecommerce companies not to issue any discount beyond 20% on their sites even during mega sales events so that the offline retailers do not suffer. But the question is if consumers get the same deal both in online and offline outlet stores wont they prefer ordering for it from the comfort of their house and get it delivered at their doorstep. This would anyways enhance the viability of online retailers. Besides, margins for some products sold online are higher because of elimination of physical storage and retail space investments - this should translate as lower cost to consumers, but that cannot happen if there is a discount cap present on the prices of products being sold online.
Final Trends
Whatever might be the scenario and how much ever the offline retailers raise a hue and cry against their online peers the end result is that the ongoing rise in popularity of ecommerce is not driven by discounts alone but due to the paradigm shift in major consumer trends influenced by the convenience of online shopping from the comfort of their home or office and delivery at doorstep. When retail giants like Walmart (WMT, Financial) are facing the heat of online shopping rally it can be concluded that it is not a temporary passing phase but a new crop of business format which cannot be toppled easily.
It is quite evident that Amazon in India surfaces as the best ecommerce player in the subcontinent using its experience of being the world leaders and being able to quickly learn and adapt to the Indian retail ambience. It can be well propounded that Amazon has a fairly bright future in the subcontinent and considering the population demography of India it will reflect positive results in the earnings figures of Amazon as a global unit. Hence it would be best to scale up our positions in the global ecommerce giant Amazon.
