No big discounts by E-tailers

By: and | Updated: September 26, 2016 7:19 AM

Revved up by the spike during the sale days, the e-tailing industry generated monthly sales nearing $1.5 bn in October 2015

Festival season sales by the top two e-commerce firms — Flipkart and Amazon – which begin from October 1, are not expected to see steep discounts as was witnessed a year back, reports Anushree Bhattacharyya & Hita Gupta in New Delhi. (Reuters)Festival season sales by the top two e-commerce firms — Flipkart and Amazon – which begin from October 1, are not expected to see steep discounts as was witnessed a year back, reports Anushree Bhattacharyya & Hita Gupta in New Delhi. (Reuters)

Revved up by the spike during the sale days, the e-tailing industry generated monthly sales nearing $1.5 bn in October 2015

Festival season sales by the top two e-commerce firms — Flipkart and Amazon – which begin from October 1, are not expected to see steep discounts as was witnessed a year back, reports Anushree Bhattacharyya & Hita Gupta in New Delhi. According to market research firm RedSeer Consulting, the reason for lesser discounts is the government directive which limits e-tailers to sourcing not more than 25% from a single seller.

“With the new directives from the department of industrial policy & promotion (DIPP) of capping total sales originating from a group company or one vendor at 25%, India’s fundamentally strong e-tailer market cannot foray into aggressive discount schemes,” Anil Kumar, CEO of RedSeer Consulting, says. However, he expects the focus to be on marketing and quality customer segments, which will be a win-win situation for online shoppers. Both Flipkart and Amazon have their own seller arm from which bulk sourcing used to happen earlier, which has come to an end since the new policy came into force earlier this year. The e-commerce firms have since been broad-basing their seller base, which automatically limits the amount of discount they can provide without incurring losses, say analysts.

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