No dip in discounts by etailers post-GST; demand likely to remain unchanged

The pre-GST sales were advertised as such by ecommerce firms (and offline retail stores) that it would be the last sale event before the festive season that starts around September-October. But one look at etailers’ websites and you would realize that the heavy discounts are still being offered.

Reliance Retail’s Ajio is offering discounts of up to 60% in its ‘The Everything on Sale’ sale. Flipkart’s current discounts are as high as 80% on fashion products. Amazon Fashion end-of-season sale is still on. So are Flipkart fashion arms’ Jabong and Myntra’s clearance sales.

Demand and supply likely to remain the same post-GST

In the anticipation of GST and its effect on ecommerce, customers didn’t shy away from loosening their purse strings during sale events. But ecommerce players don’t think that the demand is going to drop even in the post-GST period.

Utkarsh Biradar, Senior VP – Products at Shopclues affirmed,

“We do not see any difference in taxes on goods sold online and offline even with GST and hence consumption or demand is unlikely to change.”

According to etailers, fashion remains the fastest selling category. But surprisingly even big ticket heavy items like furniture found many takers. Online furniture stores such as Pepperfry are offering up to 55% discounts in its ‘Happy GST Sale’.

Is confusion over price fluctuation contributing to post-GST demand?

Industry experts believe that customers are yet to completely understand the impact of GST on prices of various product categories. This has led to high online sales in the last few weeks.

MS Mani, Senior Director at Deloitte India explained,

“What seems to have happened is that ecommerce sites have woken up to the fact that GST would bring uncertainty in the minds of customers on whether prices would go up or down. In this scenario, customers are buying products and ecommerce sites are simply tapping in on that sentiment. This has seen an uptick on sales and traders do not see any reason for those to go down, thereby continuing with their deals even after the implementation of GST.”

Another reason cited by industry observers is that ecommerce companies’ preparedness to deal with GST ensured that the negative impact is minimal; thus there was no major dip in demand. Seller training and transition started much in advance, because of which a majority of sellers were GST compliant earlier than expected.

“GST would not lead to any slowdown. It is not bad for either customers or sellers and will only make people work in an organized manner… Majority of sellers on larger ecommerce were already compliant under the earlier legislation, while others obtained relevant permits in the last few weeks of June. Some may be relatively affected for various reasons, but that proportion would be very small,” Mani asserted.

Online sellers, has your business been affected – negatively or positively, after GST implementation? Did you witness any increase or dip in sales?