Are e-Tailers Really Geared up for the Festive Season?
The festive season is here and online e-commerce giants including Flipkart, Amazon, Snapdeal, etc. are all gearing up with the best deals to lure consumers. The competition in this space has reached its peak, with ecommerce sites trying to outdo each other with the offer of bigger discounts, faster delivery times and attractive deals.
Last year the online sales were riddled with problems, with discounted items getting ‘out of stock’; websites crashing as they were unable to handle the customer rush and orders getting cancelled days later. The ecommerce giants are going all out to avoid the fiasco this year, since at the end of all the hard work and toil that goes into making the festive season a success, even a few such incidents can create a lot of negative publicity, which is not good for the e-tailer.
What are the market leaders doing this year to ensure smooth sailing for the customers
All the leading e-tailer’s including Flipkart, Amazon, Snapdeal, etc. have hired an extra staff of 10,000 each for the festive season that will work as interns from September to mid November to handle the rush. The extra staff will work mainly in SCM, logistics and the seller support system.
Flipkart has hired a staff of 10,000 as interns, and is also offering services like faster delivery, next day delivery and more to consumers.
Flipkart, which is on the verge of loosing its number one spot to Amazon, is planning to lure customers, with excellent offers and service. Flipkart is planning to offer no cost EMI’s to consumers on large home appliances, mobiles, other electronic products, etc. to compete with rival Amazon.
Flipkart is also planning to offer Re. 1 sales, which had seen a great response two year back. It will also be extending the sale to its fashion portal Myntra as well as the recently acquired Jabong. Two digital films were released last week for Flipkart’s Big Billion Day Sale. The online seller will not be spending too much on the advertising and marketing of its Festive sale, as it is facing a cash crunch, with its funding drying up.
Snapdeal is planning to offer attractive exchange offers and faster delivery and has reportedly hired 10,000 temporary logistics staff to ensure that the orders are processed and delivered on time. Snapdeal has recently revamped it brand and has introduced services like free shipping, next day deliveries, and more via its premium service bundle, Snapdeal Gold.
To manage its sellers better, Snapdeal is providing Rs 1,000 crore through financiers to provide collateral loans so they can keep a handy stock of goods. This will help in cutting down the number of delayed orders due to procurement problems.
Global giant Amazon, which launched its Prime service to customers, will be providing one day and two day delivery to customers. The company, which has huge cash reserves, is planning to focus on customer acquisition and improving service quality. It is also planning to offer higher incentives to sellers in order to get the best deals.
The Seattle-based online retailer has decided to cut down its commission this year from its sellers by 30-35% and is planning to pass on the savings to its customers.
Amazon has spent over $3 billion in India over the last few years, and is planning to invest another $2 billion in the Indian market, making it the biggest threat to the Indian ecommerce giants.
What about the discounts?
What is notable is that unlike previous years, e-tailers won’t be able to offer huge discounts to customers this year due to the new FDI rules. The companies are also no longer willing to cut margins and burn cash this year. However, online retailers will try to win over customers this year by offering better products, customer service, etc. In a way this is good, because eventually it’ll help them shift their focus to the right things to get and retain customers. I’ve always said that discounts alone will take these e-tailers nowhere in the long run. So, overall, this festive season is geared up to be the biggest till now.
The huge online sales in October are expected to reverse the slump that has been seen in the e-commerce space this year. Research firm RedSeer had stated in its report that sales have fallen by 19% in the Jan-Mar quarter, and another 5-10% in the Apr-Jun quarter, 2016. Gross sales of companies could reach $1.5-1.8 billion during October, driven by the online sales during the festive season, according to a report by research firm RedSeer Consulting. The online e-commerce giants are backing on the successful festive season sales, to generate revenue and set the stage for future growth.
Only time will tell who truly managed to up the game this time and set the bars higher for everyone else to follow… Until then, we, the customers, should simply indulge in the many offers coming our way from e-tailers and make the most of this festive season!
About the Author: This article has been contributed by Ashish Jhalani, Founder of eTailing India & Indian School of eBusiness (ISeB). He is also a Angel Investor, Mentor, Advisor