E-commerce companies have opted for fewer discounts this festive season as they look forward to moving away from the deep-discounting game to building sustainable and profitable business models but their sales charts are still bringing in cheer, reports CNBC-TV18’s Farah Bookwala.
In the ongoing festive season, e-commerce players have seen sales grow between 30-70 percent over the non-festive season and modestly higher even compared to last year's festive season.
Players say this is reason enough to cheer as they had low expectations from this year's festive season which was not only marred by weak consumer sentiment and high inflation but also have fewer discounts on offer.
Dominant players say this is necessary as the deep-discounting game is no longer sustainable, even for a short time span such as the festive season. For instance, Jabong.com is offering a discount of up to 80 percent only on select items within select categories.
Praveen Sinha, co-founder, Jabong.com says, “There should always be a balance between a sporadic jump and a set expectation that this growth will be fulfilled in 3-5 days. We try to balance it out. I could have grown more, but I have to ensure it is a very limited growth. So, I will not go overboard to increase my sales and then not deliver on the customer sales experience.”
Myntra.com states it is not a discount player and therefore, will not offer blanket discounts even during the festive season. This year, it has increased its product offering but a smaller set of products are on sale.
Ganesh Subramaniam, CMO, Myntra.com says, “In fact we have been reducing our discounts in the last many quarters. We think relevant promotions are important, continuous discounting is not a solution.”
Online companies feel that by offering fewer discounts during the crucial season, they are ensuring that customers are shopping online for wider selection and convenience and not simply for the cheapest products.