The business of online sales: Who benefits the most?

As per an industry estimate, sales growth of 25-30 per cent is witnessed during peak discount period around festivals such as Diwali and Navratri

e4m by Anjali Thakur & Nafisa Shaheen
Updated: Aug 21, 2019 10:07 AM



With the country rejoicing over Independence Day and Raksha Bandhan together, it proved to be a double celebration period for brands as well. With all top brands offering attractive discounts, online shopping portals such as Amazon, Flipkart, Grofers and Snapdeal too came up with lucrative offers.

While rough estimates put the sales growth to anywhere between 25 and 30 per cent during the peak discount period around festivals such as Diwali and Navratri, the growth during Raksha Bandhan, Independence Day and Janmashtami this year, especially in North India, was below expectations. While it's normal to expect a sales growth of 12-15 per cent during these three events this year, industry estimates put the growth between 6 and 12 per cent.

According to Vishwajeet Parashar, Vice President-Marketing, Bajaj Capital, over the last few years, the advent of festival season in India has been synonymous with the launch of annual sale events related to Independence Day, Raksha Bandhan and Janmashtami. “Online retail stores like Amazon and Flipkart make sure that more than necessary discounts make it impossible for consumers not to buy! It's true that consumers usually get a sizeable bargain during these sale events, but the biggest benefiters are the online retailers. Through astutely planned deals brokered well in advance, online retailers make sure that their overall profit margins stay well above normal levels.”

Flash sales have helped people buy all those desired products that they probably cannot buy till an in-your-face sale happens. The idea of flash sales is increasingly seeing acceptance across sectors, from mobile phones to airlines, and from online to in-stores. Brands see flash sales as an opportunity to engage with their target audience with lucrative deals and offers to lure them into experiencing their products or services. Retail giants to start-ups across sectors are constantly churning creative and clutter breaking ideas to innovatively catch consumer’s attention.

A strong competition is observed in the market among various players.

An Amazon India spokesperson says that the vision behind these sales is to help customers celebrate every occasion.

“As the most trusted and visited shopping destination in India, our vision is to help customers celebrate every occasion. With Independence Day and Raksha Bandhan coming together this year, customers enjoyed great deals during the Amazon Freedom Sale and a specially curated Raksha Bandhan store. Smartphones, consumer electronics, fashion, large appliances and daily essentials continued to remain popular categories on, with customers enjoying great deals, extra cashback, no-cost EMI and convenient exchange options,” the spokesperson said.

According to a Snapdeal spokesperson, flash sales are built on the basis of an analysis of user purchase patterns over the past in similar period and region.

“The flash sale is usually available on limited edition products that are available at a steal deal on our platform. The deal nudges users to complete their purchase faster,” the spokesperson added.

Prashant Verma, Vice President -Marketing, Grofers, says  Grand Orange Bag Days (GOBD) is a property where everyone benefits--brands, small manufacturers as well as consumers.

"With a 4x increase in order volumes, both branded products and products from small manufacturers witnessed a surge in revenue. Consumers benefit from the unmatched savings of Grofers. With our 100 per cent Orange Cash proposition and everyday low prices, they save on all their subsequent orders. During the 9-day GOBD sale, we sold over 48 million units with about 2 lakh orders a day (a 300% per cent increase over regular days). Our GMV was a record Rs 403 crore in the sale period," Verma shared .

The benefit is shared between both, the brands and customers. The brands benefit by clearing their stock and customers enjoy their desired products. It is a win-win situation for both the parties.

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