Big Of­fers on TVs, Phones Likely This e-Sale Season

Brands, plat­forms may cut mar­gins to sweeten deals on ap­pli­ances too

The Economic Times - - Front Page - Wri­tankar.Mukher­jee times­

Kolkata: On­line sales of tele­vi­sions, smart­phones and home ap­pli­ances are set to get a big push with brands such as TCL, BPL, Onida and Sanyo, which sell only or mostly on ecom­merce plat­forms, plan­ning to give up all or part of their profit mar­gin in the up­com­ing fes­ti­val season. Not only that, mar­ket­places will slash com­mis­sions on such brands by more than half, ac­cord­ing to peo­ple with knowl­edge of the mat­ter. The move is prompted by the de­ci­sion of the top three brands — Sam­sung, LG and Sony — to not al­low on­line dis­counts ex­cept on a few on­line exclusive mod­els and the slow­down in ecom­merce sales in June and July due to the roll­out of the goods and ser­vices tax (GST) when brick-and-mor­tar re­tail­ers of­fered hefty dis­counts.

Three se­nior in­dus­try ex­ec­u­tives said Flip­kart and Ama­zon have asked the brands to give up some of their mar­gins and of­fered to do the same on com­mis­sions to sweeten the deals for con­sumers. The mar­ket­places feel that with­out ag­gres­sive deals on exclusive brands, it will not be pos­si­ble to ring up record sales. Ag­gres­sive pric­ing strate­gies and deals such as buy-one-get-one­free or prod­uct bundling are all un­der dis­cus­sions, the ex­ec­u­tives said.

While the just-con­cluded In­de­pen­dence Day sales have helped the mar­ket­places re­cover some lost ground, com­pa­nies like Flip­kart and Ama­zon now want to post record fes­tive sales. Flip­kart is plan­ning to have its an­nual mega Big Bil­lion Days sale in Septem­ber and ri­val Ama­zon is draw­ing up sim­i­lar plans, hav­ing al­ready started the ground­work with the brands. Smaller sales will be held after that un­til Di­wali in Oc­to­ber.

“Since the mar­ket­places can­not burn money on main­stream brands now due to a di­rect busi­ness re­la­tion­ship, they are plac­ing their bet solely on the on­line exclusive or fo­cused brands this fes­tive season to drive their cat­e­gory vol­umes,” said a se­nior ex­ec­u­tive at a lead­ing on­line tele­vi­sion brand. “Even dur­ing the just­con­cluded In­de­pen­dence Day sales, the fo­cus has been on these brands.”

In­dus­try ex­ec­u­tives said brands like BPL, TCL, Sanyo, Onida, OnePlus and Mi­cro­max’s Yu are look­ing to dou­ble sales this fes­tive season. In­stead of spend­ing big amounts on mar­ket­ing, TCL will have ag­gres­sive pro­mo­tional of­fers, said In­dia re­gional di­rec­tor Praveen Valecha. The Chi­nese brand plans to sell 1,00,000 tele­vi­sion sets in the up­com­ing on­line fes­tive sales. BPL chair­man Ajit Nam­biar said the com­pany al­ready of­fers ag­gres­sive pric­ing, but it will be stepped up dur­ing fes­tive season, with big­ger of­fers, a wider range and bet­ter prod­ucts. “We want to dou­ble sales,” he said. The brand is avail­able ex­clu­sively on Ama­zon.

Mirc Elec­tron­ics, which sells the Onida brand, has en­tered into an agree­ment with Flip­kart for the Big Bil­lion Days with dis­counts on exclusive mod­els. The com­pany wants to en­sure that its off­line busi­ness does not get ham­pered, said busi­ness head Su­nil Shankar.

Flip­kart did not re­spond to an email. Arun Srini­vasan, who is in charge of the con­sumer elec­tron­ics seg­ment at Ama­zon In­dia, said exclusive se­lec­tions across cat­e­gories have al­ways found strong res­o­nance with cus­tomers, with cat­e­gories such as TVs and large ap­pli­ances grow­ing by 400% year on year and smart­phones by100%.

Pana­sonic In­dia pres­i­dent Man­ish Sharma said the com­pany will bal­ance out deals to off­line chan­nels, too, since prices in the big on­line sales will be more at­trac­tive. “Even though we have dif­fer­ent mod­els for on­line and off­line, ma­jor dis­count­ing in ecom­merce has a ruboff ef­fect on other chan­nels,” he said.


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