Executives from some leading consumer companies has stated that Walmart-owned Flipkart and Amazon, tow of the country’s largest e-commerce platforms have stopped deep discounting since more than three months now.
The executives said that after the revised foreign investment policy for e-commerce in February coming into effect, online marketplaces were being quite cautious and nothing was sold below the cost price while discounts could be on private label products that were owned by the portals.
Some executives further said that in the hope of fending off the offline trade lobby, which was also a huge vote bank and had been lobbying with the political parties and the government against deep discounts online, the two online majors have decided to go slow, at least till the next government takes charge. Still some feel that maybe the online platforms are targeting profitability and are maturing as well.
Between February and mid-May this year, the quantum of online discounts had scaled down by 10-30 per cent, as compared to the same period in 2018, according to executives from mobile phone, consumer electronics and fashion and lifestyle companies. About 80 per cent of the total e-commerce business in the country is accounted for by the categories. Even though Amazon and Flipkart periodically run promotional sales, the level of discounts has dipped, the executives further said.
Abhishek Ganguly, MD, Puma, said that deep discounts had stopped entirely and that the discounts offered had dipped by 11-14 per cent in the January and March period.
J Suresh, CEO, Arvind Lifestyle Brands, stated that there was a rise in products sold at full price or at a decreased markdown. But, he added that he would be wary about the trend of subdued discounts and see if it would still continue in upcoming sales.
Also, the executives said that e-commerce marketplaces may be looking at profitability of their operations more so now besides being cautious of the revised foreign investment policy.