Coupon deals the future of Indian ecommerce?

Have you given the online coupon market much thought lately?

Of course not! The recent slashes in ecommerce discounts and marketplace buzzhave diverted everyone’s attention.

Ecommerce in 2015 thrived on discounts and coupon services. Shop Pirate shared some very promising figures about online coupons at the end of December last year. At least 91% of the people considered in their survey said they visit retailers again only after being offered coupons. They also claimed that the average coupon user spends numerous hours a week in search of coupons to make online purchases.

Shop Pirate decided to go over the numbers again and derived these trends from surveying coupon users in India.

Coupon Usage Trends in India

Coupons comprise of unique codes. These can be used at the time of purchasing products to receive special offers and attractive discounts.

Around 84% of shoppers apply coupons when shopping online!

Why such a huge portion?

Saves Money – Applying coupon codes helps shoppers save money on their total bills.

Sharable – Shoppers can share coupon codes with their friends and family.

Easy to use – People can avail of coupons through subscriptions. They are readily available online allowing shoppers to use them at work, home, during the time they commute or whenever they see fit.

Everyone seeks discounts. Around 57% of consumers do not make online purchases without coupons available. 78% of consumers said they use coupons regularly. 81% declared that they revisit stores offering coupon codes and 71% switch stores to make the best of coupons offered.

What are these coupons for?

Online consumers look for coupons that cut down the prices of:

• Electronics
• Clothing
• Health and Personal Care
• Furniture and Home Décor
• Dining
• Groceries
• Recharges
• Cabs

Where are shoppers looking for these coupons?

The highest coupon usage is in New Delhi. Pune on the other hand sees the least coupon usage during online shopping (compared to the other four major cities listed).

Where do they find coupons?

Coupons are available at multiple sources. The most popular ones include:

• Coupon websites (96%)
• Brand websites (92%)
• Retailer websites (91%)
• Search engines (85%)
• Email offers (70%)
• Social media (68%)

A whopping 70% of online consumers use their mobile phones to look for coupons to shop on the internet. Digital coupons made an impact in 2013 but it was not until 2015 that we saw significant results. The survey shows, since 2013 the demand for coupons has increased from 13% to 65% in 2015.

Where do they use these coupons?

Online coupon codes are used most at Healthkart according to the survey. Next in line is Paytm, Uber, Snapdeal, Amazon, Jabong, Myntra, Swiggy, Ola, Bigbasket, Grofers and Housejoy.

Online coupons are available in abundance. CouponDunia recorded that the growth rate of coupons in India was 62.9% in December 2015. It’s about time you started taking an interest in coupon discounts and deals. The online consumer is very receptive to them and the numbers only prove it.

Discount limitation affecting Amazon the most, out of all ecommerce leaders?

Indian Online Seller shared a report yesterday about how ecommerce biggiesAmazon, Flipkart and Snapdeal are wary of announcing big sale events due to FDI restriction on deep-discounts and advertising about the same.

The discount limitation was bound to affect etailers’ business. Although, industry watchers feel that Amazon might be the one losing the most compared to rivals Flipkart and Snapdeal.

Amazon India, the biggest spender

The reason being, out of all the three ecommerce leaders, Amazon India was splurging more than the other two. Not that Flipkart and Snapdeal were spending reasonably.

The American etailer pumped Rs. 1,980 crores into its Indian arm in December 2015. Flipkart’s biggest investor Tiger Global too injected over $1 billion into Amazon.

It utilized the accumulated funds for funding deep discounts, aggressivemarketing & promotion tactics, improving logistics, setting up warehouses and increasing seller base.

“Amazon was beating Flipkart and Snapdeal at their own game of discounting deeply so in the short term. Yes, the new regulations will pull back Amazon slightly because it cannot discount and advertise as freely as it was doing earlier,” said Harminder Sahni, MD – Wazir Advisors.

The 25% sales cap from one seller is also adding to its woes, as they need time to restructure. A factor that Snapdeal doesn’t have to worry about since the company never had one big seller like Amazon’s Cloudtail and Flipkart’s WS Retail.

Customer-first approach might help

While deep discounting may not be possible for now, experts believe that Amazon’s consistent customer-first approach and investments will help them to maintain leadership position.

Sahni rightly stated,

“Over the long term, the regulations may be good for Amazon. It excels at customer service and offering the widest range of products. If the e-commerce game comes back to basics, Amazon will surely emerge as the winner.”

The company is focusing on tier 2-3 cities and its ad-campaigns now emphasizeon ‘trust’ and ‘easy returns’ instead of discounts. Amazon also recently dethroned Snapdeal and is also India’s buzziest, trusted and most visited ecommerce site.

Flipkart challenges entry tax on online sale in Gujarat in HC

Gujarat High Court today issued a notice to the state Government on a petition filed by the online retail major Flipkart against the entry tax in the state on the goods bought through the ecommerce portals. The division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi scheduled the next hearing for June 9.

Flipkart has claimed the tax is discriminatory, because no such tax is imposed on the goods brought into Gujarat thorough other modes of sale. It moved the HC after the Gujarat Government amended the law to levy entry tax on goods purchased through e-commerce portals, apparently to provide a level-playing field to the traders and retailers in the state.

The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed on March 31. Now 15 per cent entry tax is levied on the online purchases.

Flipkart’s contention is it does not sell any product itself but only provides an online platform to manufacturers/ traders, so the tax is unjustified. The new law amends the word “importer” to cover those who “bring or facilitate to bring any specified goods for consumption, use or sale in Gujarat from any part of the country using online platforms.”

Craftsvilla cements growth trajectory with latest buy – clothes rental F2SO4

Leading marketplace for ethnic apparel and accessories, Craftsvilla, has purchased F2SO4, a company that rents out designer clothes. F2SO4 also provides tailoring services. The integration seems to be complete, with the F2SO4 site directly leading to Craftsvilla’s home page.

Tailoring, fitting & wedding planning services in the anvil

Manoj Gupta, co-founder and CEO of Craftsvilla is optimistic about the future of service-based marketplaces. He says,

“Many services marketplaces will emerge between 2016- 2020. These could include something as basic as tailoring to as advanced as wedding planners. We see stitching as an important peripheral ethnic service for our customer experience and we see lot of post purchase demand around this from our customers. F2SO4’s sizing and fitting service was a big draw for us to acquire them.”

Amrit Singh, co-founder of F2SO4, says of the acquisition,

“At F2SO4 we always dreamed of becoming agents who enabled experimentation and rich experiences, and I am glad we are realising our vision with our customised sizing and fitting solutions.”

Craftsvilla on acquisition spree

In the recent past, Craftsvilla has bought companies including Sendd and PlaceofOrigin. Both acquisitions were in February 2016. Sendd is a logistics start-up with tie-ups with nearly 25 logistics companies. Post the acquisition Sendd continues to operate on its own through its app, and has clients apart from Craftsvilla.

PlaceofOrigin sells ethnic foods including pickles, snacks, jams and sweets. Manoj Gupta said,

“We are looking to capture the ethnic market and this year the time looks good for acquisitions and growth.”

Both acquisitions appear to be with the intention of propelling primary and secondary ecommerce features. With the latest buy of F2SO4, it shows that Craftsvilla has a clear plan in mind, and is heading towards attaining monopoly in the ethnic sector. The etailer is not content with apparel alone; it has also stepped into traditional foods. This shows that Craftsvilla has chartered its map for the road ahead.

Walmart plans direct entry into India’s online food & grocery industry

Early this year, there were talks about Walmart collaborating with Flipkart, Snapdeal, BigBasket and others to enter the Indian ecommerce market. Looks like it may not happen as latest reports suggest that the American retailer is looking to enter directly.

Plans to sell directly to Indian consumers

Walmart is a strong player in the Indian B2B retail segment and has several wholesale stores across India. The firm is now exploring the option of selling food products directly through offline and online stores in the country.

“The business of brick-and-mortar food retail stores and online sale of food products is of interest to us, but we have to evaluate the policy guidelines once they are notified,” confirmed Walmart India’s Chief Executive Krish Iyer.

FDI, the saviour

The change of strategy is quite possibly due to the government’s decision to allow 100% FDI in food marketing. The upgraded ecommerce rules and regulations have now enabled the company to function independently instead of tying up with a national firm.

Calling 100% FDI a ‘progressive step’ Iyer said,

“Never in the Budget has the government taken so much interest in retail, and it is encouraging. 100% FDI in food marketing is a progressive step. 100% FDI in food marketing will provide better realisation to farmers and bring down prices of essential commodities.”

The growing food & grocery segment

India’s online food and grocery industry is going through a sea change. Just a week back Gurgaon-based e-grocer PepperTap closed down.

In spite of the several challenges and changes, it remains one of the fastest growing segments. It is growing at a CAGR (compounded annual growth rate) of 62%. Retail giant Walmart wants to cash in on that. But will it succeed in a complex market like India, that too without a regional partner?

Retail consultancy Third Eyesight’s Devangshu Dutta feels,

“Retail is a local business and it won’t work without local leadership or by following global template. But given Walmart’s history, they would want to enter retailing alone as it will give them confidence on the expansion strategy as well as proper control. Even if FDI is allowed completely, the caveats or riders will mostly support local business.”

Will Walmart successfully manage to localize its strategies? And how will Indian online grocery leader BigBasket handle Walmart’s entry? Especially, when theetailer is under FDI scanner.