In the run up to the rollout of Goods and Services tax from July 1, it’s raining discounts at offline retail outlets as well on e-commerce sites, with companies rushing to liquidate their current stock as taxes will move upwards on a host of products to 18%. Though input tax credit would be available to the manufacturers which in a way checks any price rise, most retailers want to liquidate their current stocks before July to save themselves from any transition glitches. As a result the end of season sale this year, which is every year held between middle of July and goes up to August has been advanced. While multi-brand retail outlets such as Shoppers Stop and Lifestyle are running offers such as buy two products and get one free, single brand stores such as Woodland Biba, Van Heusen, Allen Solly, Being Human, are offering 30-40% discounts besides as much as 50% discount on select products. Interestingly, shopping centres claims that businesses have already seen an upswing as a result of the on-going pre-GST sale. According to Rajneesh Mahajan, CEO, Inorbit Mall, in Mumbai the sale has helped retailers and brands to witness a 14%-15% increase sales compared to last year. Similarly Pushpa Bector, executive VP and head, DLF Premium malls division at DLF Utilities claims the company’s malls have witnessed a 14%-15% surge in business thanks to the current sale.
Interestingly, offline retailers aren’t the only who wants to utilise the sale time to rake in money. For instance, Amazon India will be launching ‘Wardrobe refresh’ sale on fashion and lifestyle products starting from June 23 to 25. Besides providing 50%-80% discount, Amazon Prime subscribers will get an exclusive three hour early access prior to commencement of the sale with 20% cashback through Amazon Pay for a minimum transaction value of Rs750. While online fashion and lifetsyle portals Myntra-Jabong will be rolling out the the sixth edition of ‘End of reason sale’ (EROS) just a day later than Amazon, between June 24 and 26. According to Mytnra-Jabong, it expect to clock a 25 fold jump in its sales from the sale. “We expect 20 million users to indulge in a shopping spree to pick the finest in fashion at attractive discounts of up to 80%. In terms of traffic, we are geared to deal with 20 million sessions a day, which is 18% higher than the previous edition of the sale and 45% higher than the previous year. Our logistics team is armed to make 3 lakh deliveries each day across the country and is expected to deliver over 3 million shipments by the end of the sale,” said Ananth Narayanan, CEO, Myntra – Jabong.
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The company expects to acquire 4 lakh new customers through the three day sale. Mynta-Jabong’s parent, Flipkart too has joined hands to also launch the same sale on its platform on the same date. It will be offering 50%-80% discounts on fashion and lifestyle products. “Retailers want to clear of all credits with stockists and distributors as input credit will attract tax of around 18% on certain products from current 12.5%,” observed Suresh Nandlal Rohira, partner Grant Thornton India LLP. Harkirat Singh, MD, Woodland India, said, “Unlike demonetisation which took place in November right in the middle of festiveseason and had an adverse impact on the business, GST is being rolled out at the time of regular sale period – therefore reducing any chance of negative implications on the business”. He added that with April-June period being a lean time for apparel retail business as it contributes to just 15-20% of the overall business, the sale will only help beefing up the revenues, despite retailers taking a cut in margins, by selling at a lower rate.