Discount war: Offline retailers take on online biggies, declare 15-20% price cut, freebies and cash backs

By: | Published: October 24, 2018 4:06 AM

Sellers of consumer durables such as Vijay Sales and Infiniti Retail will offer discounts of around 15% to 20% along with cash backs and freebies this festive season, managements of these companies have indicated to FE.

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Sellers of consumer durables such as Vijay Sales and Infiniti Retail will offer discounts of around 15% to 20% along with cash backs and freebies this festive season, managements of these companies have indicated to FE.  That compares with discounts of 30% to 50%, which will be available for consumers on marketplaces such as Flipkart and Amazon.

Nilesh Gupta, managing director, Vijay Sales, said his company would watch the discount levels of e-commerce players and then decide on the final offers. “The average discount this Diwali will be around 10% to 20% and there will be freebies given with purchases. Products like high-end televisions or high-end mobiles will be sold with more discounts of around 25-30%,” Gupta said.

Anil Kumar, founder and CEO, RedSeer Consulting, said the benchmarks for promotions and discounts are being set by the e-tailers and others would follow even if it meant taking a hit on their margins. “Online retailers are continuing with aggressive discounts of around 30% to 50%, at levels that are similar to those given in 2017,” Kumar said.

Infiniti Retail, which runs the multi-brand consumer durables retail chain Croma, will also offer discounts of around 10% to 15%. Abhijit Mitra, CEO, Infiniti Retail, said discounts this festive season will be setting in at around 10% to 15% and may go up to 20% to 30%.

“Higher discounts of 20% to 30% will be more cosmetic as depending on the model or maybe some cash back or freebies rather than upfront offers,” Mitra said. Discounts are more or less at last year’s levels, Mitra added.

In 2017, during the festive season, consumer durable retailers witnessed sales of around 10%. This time they are expecting to do better. As GST was implemented from July 1, 2017, offline and online retailers and brand manufactures wanted to clear stocks and had offered discounts as high as 40% to 50%. Gupta of Vijay sales said, “While the companies witnessed 100% growth in sales in June 2017, with customers making their purchases before the implementation of GST, the festive season demand was impacted, and we witnessed a low growth of 10% as most of the purchases were made in the month of June in 2017.”

Gupta said companies are not passing on recent hike in import duty on compressors to consumers during the festive season as they don’t want demand to get impacted. While the demand during the festive season is expected to be strong, the weak stock markets and loss of wealth may dampen the mood. Rajat Wahi, partner, Deloitte, said: “So far, demand looks strong, but with the overall concern in the stock market and economy, consumer sentiment maybe dampened.”

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