Wednesday 1 April 2015

E-tailers turn towards strategic discounting of select brands only

Online buyers who were pampered with discounts and coupons last year during Diwali, New Year and GOSF, have experienced a dull period in the last two-three months with e-tailing firms going slow on offers and rate cuts.
According to Sameer Parwani, CEO, CouponDunia, there isn’t a lot of action happening in the promotions and discount section. “The last two-three months were a very weak period of the year in terms of shopping. Traditionally when it comes to e-commerce and the kind of pattern that I have seen in the past, there aren’t many promotions happening,” Parwani said.
In May 2012, Times Internet had acquired Mumbai-based CouponDunia and merged Times Deal, its coupon platform with CouponDunia. With this merger, CouponDunia which was earlier only an online deals and discounts place, also got offline merchants on its platform.
Parwani is betting big on the reach and redemption rate of offline discounts compared to online.
“Two months ago e-tailers were running crazy discounts. But now I think it’s in their best interest to keep the prices high,” Parwani said.
A partner with a venture capital firm who did not wish to be named said there are genuinely fewer discounts available and due to that customers are discouraged to check for new coupons on an affiliate’s website.
“Coupons will have to undergo change, re-do their business model and come up with innovative stuff. We see offline commerce getting more traction. The coupon sites might want to create a system by which offline merchant is willing to give them coupon,” said the source.
“One of the main reasons online discount has gone down is that there is a lot of pressure on online players from investors to show profitability today,” said Sajid Fazalbhoy, Principal, Blume Ventures.
Rohan Bhargava, Co-founder, CashKaro, which partners with online retailers to give discounts and cash backs, said unlike the discounts offered till last year, the e-commerce companies are now ‘strategically’ giving discounts on specific brands.
“They are being a bit strategic on which brand to focus on for discounts. Roadster is an in-house brand of Myntra, so they will focus more on such brands which provide better margins,” Bhargava said.
For Anisha Singh, Founder, MyDala, offline discounts and offers are much more exciting, in terms of value and volume both.
“Online and e-commerce in India is still controlled by three or four heavy hitters who control 80% of the online transactions. For us, the exciting opportunity is enabling the SME market fully, which no one is doing in India,” Singh said.
MyDala offers discounts and coupons of online and offline merchants, but is bullish on brick-and-mortar retailers located in small towns. By partnering with all the telcos, MyDala has reached more than 250 cities in India.
Launched in 2009, it is one of the few consumer internet companies to turn profitable while scaling.
“Online discounts is just 10% of the overall business that we do. For us it’s just an add-on feature for users to know that we have such offers too,” Singh said.
Seeing the scope of offline discounts, other players are also concentrating on partnering with them.
CouponDunia is trying to strengthen its offline discounts by pushing its mobile app and putting more foot soldiers on road.

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