Big Offers on TVs, Phones Likely This e-Sale Season
Brands, platforms may cut margins to sweeten deals on appliances too
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.