Flipkart’s ‘Big Shopping Days’ sale sees slow start. Will banning of discounts by DIPP hurt?

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Bangalore | Updated: May 26, 2016 11:48:44 AM

Flipkart is running a three-day ‘Big Shopping Days’ sale which seem to have taken off without much ado.

Flipkart did not comment on the story and it is not clear the cash burn is contributed by the company or the merchants themselves.Flipkart did not comment on the story and it is not clear the cash burn is contributed by the company or the merchants themselves.

For the first time after the Department of Industrial Policy & promotion (DIPP) barred discounts, predatory pricing and those “big discount sales” by online e-commerce marketplaces in March this year, Flipkart is running a three-day ‘Big Shopping Days’ sale which seem to have taken off without much ado.

This the sixth such sale the company is promoting in the last two years following the last one in March 2016. The sale this time is both on mobile app and website offering discounts from 20-50% on mobiles, laptops, electrical and electronics, fashion and other categories.

Unlike the previous years, the company has not promoted the sale with much of marketing and promotional activities and print advertisements. Flipkart did not comment on the story and it is not clear the cash burn is contributed by the company or the merchants themselves.

The deep discounts offered by the e-commerce players had raised the ire of the retailers as these were affecting their sales. Now, with the DIPP laying down the guidelines, it has become difficult for them to offer the freebies.

Talking to FE, Kumar Rajagopalan, CEO of Retailers Association of India, said, “The DIPP has given out clear instructions. We are not making representation against any individual company, but if it is found that the online retailers are influencing the pricing, then it is for the Enforcement Directorate to take action against them.”

During the heydays of online discount shopping, Flipkart, Amazon and Snapdeal and Paytm fought over aggressively with tags like Big Billion Days and Great Indian Festival Sale. During this period, e-commerce players witnessed 3-5 times increase in sale compared to normal days. The discounts on certain range of products went as high as 80% along with some cashback offers.

For example, Flipkart ‘Big Billion Days’ sale in October, 2015 which lasted five days recorded a business turnover of over $300 million in gross merchandise volume (GMV), which was three times bigger than 2014 with the participation of 40,000 sellers and millions of visitors.

According to a report by RedSeer Consulting, the daily average sale for the etailing industry grew more than 4x last year. The report further added that etailers, especially Flipkart offered subsidies in the range of 15-20% to the sellers in the electronics and home appliances category, leading to high sales.

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