Big billion sale II: Why Flipkart can't afford to mess up

Wiser from the experience of the previous year, Flipkart is leaving no stone unturned to ensure that the second edition of its 'Big-Billion Sale' goes off without a glitch.The sale from October 13-17 will be available only on its mobile app."Bigger and better as compared to last year, we have worked towards ensuring a seamless shopping experience for our customers," says Flipkart head of commerce Mukesh Bansal, adding that he expects it to be the biggest shopping event of the year.The maiden sale in October last year made headlines for technical snags and stock shortage, drawing the ire of online shoppers on social media and forcing Flipkart founders to issue an apology.The company this year has invested heavily into technology and is upgrading logistics as a precaution. According to this report in The Economic Times, the company will have over 19000 delivery boys, including those from Ekart, delivering to over 40,000 pin codes across India, during the festive season.The sale comes at a time when the e-commerce landscape in the country is seeing subtle changes in investor perception as well as consumer trends. While e-commerce is still the buzzword in town, investors have become wary of the lofty valuations and the claims being made by companies seeking capital. A couple of weeks ago, an Australian hedge fund manager publicly disputed alibaba.com's sales numbers. Back home, a report in a business daily showed how foodpanda.com was being gypped by its vendors, who exploited the discount vouchers offer through a shortcoming in the software system.Valued at almost USD 15 billion, Flipkart continues to make losses even as it hopes to become profitable in two years.Flipkart has been in talks with new investors since March, but it has not been able to close in on a deal due to unacceptable terms. However, it recently raised USD 700 million from Steadview Capita, Tiger Global and other existing investors.

Flipkart's rivals too are not finding the going easy.Snapdeal conducted negotiations with China's Alibaba Group Holding and Taiwan-based Foxconn Technology for more than six months, before finally closing a USD 500 million deal at a valuation lower than what it wanted.A Mint report quoting Avnish Bajaj, managing director at VC firm Matrix Partners, says: "Investors are starting to ask questions about long-term sustainability. The number of USD 50 million deals has gone down. Deals are taking longer. This is a soft landing and it’s a good sign. The time correction is likely to be followed by a price correction."There are signs of fatigue among online shoppers too, with sales of all top online retailers slowing sharply in the first quarter of FY16.Having pampered online shoppers, e-tailers in general are finding it hard to wean them off juicy discounts.It is a tricky situation for e-tailers. Some of them have said that the discounts this festive season will not be as aggressive as they were in the past. But it is a Catch 22 situation for the companies. If the discounts are not enticing enough, buyers will not bite. That could hurt valuations, and funding. But if the discounts are attractive, the losses will increase and investors will not be happy.As the countdown for the Big Billion Sales begins, Flipkart will be facing the same existential question that its rivals too would be grappling with: whether to please the customer or the shareholder?