Lacklustre start to Amazon sale

Bengaluru, Aug 8: Amazon’s three-day discounted sales festival — Great Indian Sale — kicked off on Monday on a sedate note, unlike previous seasons.

While the company offered discounts in the range of 20-70% on various products, it was limited to not-so-popular brands. Post the new FDI rules and DIPP guidelines which stipulate that e-commerce players should not offer deep discounts and influence the sale price of the goods, e-commerce companies have been finding alternative ways to fund discounts and offers.

On the first day of the sale on Monday, Amazon reported that in certain categories their sales had increased multifold. It reported a daily run rate of 5x for large appliances, 10x for software products, 4x for PC accessories, 2x for toys and 5x for kids apparels.

An Amazon official who did not wish to be quoted said ,“We are not violating the DIPP guidelines by offering discounts on products. We are only using this as an opportunity to promote the brand and the portal in the country.” Like its competitors Flip k art, Mynt ra and Jabong, Amazon India too, which had temporarily stopped sales events, is discounting as freely as before. Last year, Flipkart, Amazon, Snapdeal and Paytm fought aggressively during Big Billion Day and Great Indian Festival Sale, seeing 3-5 times increase in sales compared to normal days offering discounts upto 80% on certain categories along with some cashback offers.

Harish H V, Partner at Grant Thornton said, “We feel that the government should not interfere in such matters. If they keep restricting (discounts and offers), there’s no end to it and companies will keep finding loop holes. For instance, if it is physical retail-the companies have to put up a store, furnish it, decorate, advertise and do promotional activities to attract customers. That is the cost of acquisition for them. Similarly ecommerce players do it by way of offering discounts.”

TheFlipkart ‘BigBillionDay’ sale last year saw a business turnover of over $300 million in gross merchandise volume (GM V ), which was three times bigger than last year with the participation of 40,000 sellers and millions of visitors.