Festival online sale in India
Smiling, my friend Preeti tries to explain her husband’s addiction for online sales. She is vexed with her husband’s “discount addiction”. She says, referring to Mithun, a retired government officer who suddenly wakes up in the middle of the night to check at an online shopping site whether his discounts are increasing. After a frustrating week of remaining online for hours, the packages arrived: An Oven, Samsung mobile, a television, a toaster.
In India’s popular festival season, Raksha Bandhan and many other festivals in the month of August including Independence day, online retailers are putting every effort to attract customers through deep discounts, of a kind never heard before. Earlier discounts of 5-10 percent were the norm in physical stores. Now even for high value products like laptops, the online discounts – on sites like amazon, Flipkart, Jabong, Snapdeal- are much higher now.
Consumers, they feel will be the winners here as the efficiencies promised by online shopping will challenge the thick profit margins being made by wholesalers ,dealers, retailers, distributors and physical retailers. As online shopping is increasing, it looks like discount culture will only increase.
In Indian culture with the price sensitive consumer discounting will never fail. India is not a pioneer to this culture. In the US, deep discounting discounts, coupons are in vogue for decades.
There seems some deep rooted problems of Indian consumers to this culture of online sales. Most Indians are yet to get convinced of the security and reliability of online sales, a point proved by the fact that online sales happen on cash-on-delivery in more than 80% of the cases. 25%of deliveries fail and are even returned for various reasons. The other problem is that an online buyer cannot touch, see and, feel the product initially (while deciding to buy). The virtual “feel “is not there.
Many consumers also feel that online retailer’s sell includes old product lines from companies. Many retailers are warning the customers in some cases that online warranty may not be available. But legally a consumer has no right to reject warranty.
Now the question is how long will these online sales exist? Analyst feels these discounts cannot continue for long because many of these online players are subsidizing their discounts. The practice of putting money from your own pocket and selling products to attract customers and gain market share and price and price some of the competitors out of the market is not very effective for long. They will have to rethink their business models. This situation is not going to change immediately, the sales will continue for 3-4 years before further consolidation says Rama Bijapurkar, marketing analyst. Price is surely not the only way to push customer perceived value but it is a quick and sure shot way to do so in our country where desire is so strong, and good deals are irresistible “says consumer and marketing expert Rama Bijapurkar.
The great Indian online sales will continue till Christmas. Online players change the rules of the festival sale game.