Snapdeal sale: Festive season offers, discounts set to start September 1; e-retailer vows to bring much cheer to all users

Ecommerce firm Snapdeal today said it will host a three-day sale offering “double-digit” discounts across categories like electronics, fashion, and home between September 1-3. Snapdeal, which was engaged in merger talks with larger rival Flipkart till last month, will compete against the Bengaluru-based firm and Amazon that are likely to announce their own festive season sales in the coming days.

“With double digit discounts on consumer favourites like electronics and fashion, this 3-day sale is bound to bring much cheer to all Snapdeal users and beyond,” Snapdeal said in a statement.

When contacted, a Snapdeal spokesperson said this is the “first of many such special promotions lined up for the festive season”. Snapdeal’s announcement comes at a time when most ecommerce companies, including Amazon and Flipkart are gearing up for the festive season.

Amazon today announced setting up of its fifth fulfilment centre in Haryana as it looks to ramp up storage capacity. Overall, it has over 40 such warehouses across the country. The US-based firm said it now has close to 3.3 million cubic feet of storage space in Haryana and the move will enable faster deliveries to customers.

Flipkart ropes in Asian manufacturers for its affordable private label products

Back in May, Flipkart had made it clear that private labels would dominate its product offerings during the Big Billion 2017 edition. For the same, the etailer has collaborated with manufacturers from China and other Southeast Asian countries besides home country India. These manufacturers are helping Flipkart to create an affordable range of products for its private labels.

“We already have over 30 segments where SmartBuy is present and we should be able to expand it to close to 40 categories before Big Billion Day sales. This festive season, we are looking to push private labels during sale events, given the way we have ensured quality checks and standard manufacturing practices,” asserted Adarsh Menon, Head – private labels at Flipkart.

We’ll launch products 15% cheaper than competitors, says Flipkart

The push for private labels is going to get even more aggressive once the festive season starts. The Bansals-led company is planning to launch a host of products that would be available at 15% lesser price than the average price of the same products of other sellers/retailers.

Flipkart has joined hands with Sharetronic to develop a range of electronic products, which would be launched under its Smart Buy private label. The Chinese firm has worked with several global brands like Lenovo, Huawei and Toshiba. The manufacturer believes that Flipkart’s wide reach and leadership position would help them to grow their business.

For quality checks, the home-grown marketplace has hired the services of Intertek. Instead of loading the products with all possible features, Flipkart is sticking to the basics.

Menon said,

“For any product, there are ‘must-have’ features and then nice-to-have’ ones. We are focusing on the must-have features first and bringing them at a cheaper price than average market rate. We have partners like Intertek that run multiple levels of strict quality control before we start selling them on Flipkart.”

Private labels equals to more profits for Flipkart

It is not rocket science to figure out why biggies like Flipkart are investing in private labels. After accumulating tons of consumer data and analysing their seller base’s sales patterns, etailers have the power to develop the right products for their buyers.

Own brands would give Flipkart a better control over its inventory and not to forget – high profit margins.

“We are studying customer data intensively; what feature the customer really values in a particular category. Take, for instance, a mixie. The customer values the motor. It doesn’t really matter if the colour is grey or silver. We have tried to double down on features that the customer values in these categories. We are working with quality partners,” sharedMenon.

Big Billion might turn out to be one of the biggest sales events for Flipkart. But would it be the same for its vendors? The ecommerce biggie has been accused of undercutting sellers in the past. After hearing about 15% cheaper products, we don’t think many vendors have a favourable view of Flipkart’s private labels strategy. Sellers, let us know what you think by commenting below.

Snapdeal seeks to stay relevant, reserves Rs.40 cr. for festive promotions

Looks like Snapdeal will be participating in the festive season sales this year. After the merger deal break with Flipkart, the etailer decided to fly solo. Now it is gearing up to capitalize on the biggest shopping season of the year to avoid being wiped out by competition.

Festive season plan & promotion budget

Usually, during the festive season, there is a surge in the sale of:

• Jewellery
• Clothing
• Consumer durables
• Phones
• Vehicles

This Diwali, Snapdeal will be focusing on fashion, general merchandise and electronics, a spokes person for the company said.

Companies usually spend heavily on advertising to drive shoppers their way for ensured sales. As a result, Snapdeal has set aside Rs. 40 crore for its festive season promotions, claimsources aware of its festive season plans.

Promotions will be done through mass media advertising and digital campaigns during this festive period. Outdoor advertising will be take place in key metro cities like Mumbai and Delhi.

The combined contribution of festive season sales is 35-40% of the total annual sales of both online and offline retailers. This peak period usually kicks off during Ganesh Chaturthi and Onam, hits its peak just before and during Diwali, then continues till Christmas and New Year’s.

DIPP grants Urban Ladder single brand retail license

In April, IOS reported that Urban ladder applied to the Department of Industrial Policy and Promotions (DIPP) for permission to become a single brand retailer. In a recent statement, the online furniture company said their application for a single brand retail (SBRT) license was approved by the DIPP.

Becoming India’s most loved brand

Ashish Goel, CEO of Urban Ladder said, “The SBRT licence is a huge vote of confidence and encouragement from the government to young, Indian companies like ours. Creating a nurturing ecosystem for entrepreneurs is beneficial for business, customers, and the country.”

This licence is also going to allow Urban Ladder to:

• Convert current online sellers into contract manufacturers
• Fulfil its ambition to be a global furniture retailer
• Offer more flexibility when it comes to designs and product sourcing
• Allow more control over the supply chain for healthy inventory
• Enable digital transactions without the need for third-party sellers

Goel further claimed that, “This licence helps us at Urban Ladder build a brand that can pursue its ambitions as well as help shape the economy impactfully. It will give us the necessary push in becoming India’s most loved consumer brand.”

Expansion and profitability

While the furniture etailer waited for approval from the DIPP, it coaxed investors for funds. It also revealed its plans for physical stores and wound up three warehouses as part of its plan for profitability. Urban Ladder even signed up to sell on Amazon and Flipkart for improved visibility. Almost a year ago, the etailer planned on touching profitability in 2 years. Well, it’s one year down but there are no such signs of it speeding towards profits.

Hopefully, its offline approach paired with its single brand strategy will lead the way to the big bucks for the online furniture retailer.

Ecommerce firms’ annual sales from each vendor capped at 25%

Ecommerce players like Flipkart and Amazon will not be allowed to market more than 25 per cent of its annual sales coming from one vendor, the government on Monday clarified. The government had earlier mandated 25 per cent maximum sales from a single vendor but had not specified the period for computation of sales.

“An ecommerce entity will not permit more than 25 per cent of the sales value on financial year basis affected through its marketplace from one vendor or their group companies,” the Department of Industrial Policy and Promotion (DIPP) said in its consolidated FDI policy circular, released here.

An official, who did not wish to be named, said that this provision encourage e-market players to sell goods from different vendors.

The DIPP in a tweet stated that restriction of 25 per cent on sales of one vendor through a marketplace are to be computed on financial year basis. In the foreign direct investment (FDI) circular, the DIPP has also included the definition of ‘competent authority’ to grant government approval for foreign investment.

It said the authority means the concerned administrative ministry/ department empowered to grant government approval for foreign investment under the extant FDI policy and FEMA (Foreign Exchange Management Act) Regulations. As the foreign investment promotion board has been abolished, the respective ministries have been authorised to approve foreign investment proposals.

Further, the government clarifies that conversion of an LLP (limited liability partnership firms) into a company and vice-versa is permitted under automatic route for sectors where 100 per cent FDI is allowed.

The DIPP, which deals with FDI related matters, compiles all policies related to foreign investment regime into a single document to make it simple and easy for investors to understand.