Thursday 25 August 2016

Etailers set aside crores for festive sales; will sluggish growth pickup amid regulations?
After wrapping up Independence Day sales, ecommerce companies Flipkart, Amazon, Snapdeal and others have started the prep for upcoming festive sale season.
From introducing news services, offering credit to sellers and letting go of seller commissions, online marketplaces are trying new methods to increase revenue during peak sales period.  

Snapdeal reserves Rs. 200 crores for Diwali sales

According to latest reports, Indian etailer Snapdeal is planning to spend a whopping Rs 200 crores on festive season marketing campaign over the next two months.
The campaign will be splashed across digital, print, television, YouTube, billboards and social media platforms in September.
Speaking about the 360-degree marketing activity, Kanika Kalra, VP – Marketing at Snapdealsaid,
“Diwali is the most relevant shopping season in India and we have decided to leverage this opportunity to strengthen our distinct position in consumers’ mind. It is not just advertising, but our whole ecosystem is gearing for the season. Our platform and logistics are geared to handle huge surges as India gets into the festive spirit, while our sellers are readying their stocks to offer the best assortment and choices to our consumers.”

Will it help to accelerate the slow growth?

The euphoria around ecommerce funding has died down and many startups are struggling due to lack or limited funds, including big ecommerce players (in spite of strong denial). Add to that, the slow pace of growth and FDI rules & regulations.  
Experts predict that due to FDI policies laid out by DIPP regarding discounts and promotions along with overall market saturation, the sales volume of this year’s festive online sales edition will not be very high.
“The overall growth in volume for the festive season between September and November is estimated to be a modest 20% increase over corresponding quarter last year. Some of it can be attributed to digital saturation for buying mobiles and consumer electronics online, which have been the chief drivers of growth for online marketplaces,” said Arvind Singhal, Chairman & MD of Technopak Advisors.

Ecommerce companies are FDI compliant or not, that is the question

While we are discussing festive sales, crores of money to be splurged on marketing campaigns and etailers’ innovative ways to give discounts, it is hard to ignore the whole ‘FDI norms’ angle.
Government has asked online retailers to follow the ecommerce guidelines. But are they listening?  Offline retailers and sellers think they are not. But etailers insist ‘we are not breaking any rules. ’          
After receiving several complaints, the Department of Industrial Policy & Promotion (DIPP) and the Ministry of Consumer Affairs arranged a meeting with all big ecommerce firms.
“Companies showed their commitment towards ensuring all compliance and we have also not received any complaint on violation on their part ever since,” said a DIPP senior official.
Etailers assured the officials that all discounts are/were offered by vendors and they are adhering to ‘marketplace will not directly or indirectly influence the sale price of goods or services’ FDI rule.

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