Ecommerce wars – what is the real deal amid all the offers and discounts?

(This article first appeared on YourStory.com here)

E-commerce in India has reached its current state after going past a few major milestones. With Flipkart achieving the $1 billion GMV and also raising a humongous $1 billion in a single round, the ground is set for the battle in the sector.

Retailers across India know that the festival season, usually August-November, is when consumer go slightly berserk. After all, it is the most auspicious time of the year to make big purchases and that’s when retail stores (online and offline) flood the market with offers, deals and what-have-yous.

This year, the e-commerce giants of India, mainly Flipkart, Amazon India and Snapdeal,  flush with  latest rounds of VC funding or investments from the parent organization, are going all out to acquire customers, whatever the cost. Leading newspapers like the Times of India are carrying full-page advertisements on the front page every other day, with ad inventory being sold out until Diwali.

E-commerce Featured

Probably in a bid to differentiate itself, Flipkart launched the ‘big billion day’ sale along with a matching television ad campaign for the past two weeks. It was projected as the mother of all flash sales, with the aim of surpassing the turnovers of multiple day sales in a single day. A couple of days before the day of the sale, which is 6 October (6-10), subscribers also received a Flipkart newsletter supposedly carrying a personal message from the founders Sachin and Binny Bansal explaining how they started off the ecommerce venture in Flat #610 back in 2007. The message also promised a field staff of 10,000 deployed today to ensure quick and timely delivery of orders.

Flipkart Snapdeal paper ads

Not to be left behind, Snapdeal, a full-fledged marketplace, trolled the Flipkart sale with a message in a full-page advertisement immediately after Flipkart’s advertisement. The message read ‘For others it’s a big day. For us, today is no different. Best savings guaranteed. Every day. Check Snapdeal before you buy’, clearly hinting that the discounts available on Flipkart today are matched or bettered by the Snapdeal offers. This is reminiscent of Coca Cola paying the price to be the official sponsor of the Cricket World Cup a few years ago, only for Pepsi to ride the wave and hijack all the eyeballs with a corresponding ‘Nothing Official About It’ campaign. In addition, Snapdeal has also put together large multi-day campaign in the build up towards Diwali with a panel of celebrities including Rana Daggubati, Harsha Bhogle, Mandira Bedi, Pulkit Samrat, Kapil Sharma and others, with newspaper and television advertisements running in tandem to drive home the message.

Not all is hunky-dory though. There have been unhappy voices heard on social media about Flipkart’s sale strategy being a marketing gimmick. “Logged in at 8am itself. Such a waste of time” said one regular online shopper, who found most of the advertised products already out of stock. Snapdeal too, promised the iPhone 5S at INR 24,999 but that too seemed to be out of stock. Most of these product categories that were advertised would logically be on a limited portion of the stock for a very limited period of time, like any other retail outlet. It would simply be impossible to allow such deep discounts on the complete product portfolio when the ecommerce players are already bleeding.

That’s not all. A private blog also did a pricing analysis of specific product categories using the ‘Buy Hatke’ comparison tool which showed the price across the past few days. This analysis showed that for those products, the prices had suddenly increased one day before the sale, only to appear as a ‘deep discount’ on the day of the sale. As of this morning, Flipkart had disabled the Buy Hatke  plugin on their site. The popular ‘steal deal’ also did not seem to be working within a few minutes of the sale starting at 8am today.

While this strategy itself is not illegal or wrong – most retailers employ it – it is probably a case of setting huge expectations with a massive advertisement campaign, only for the audience to feel let down by the unavailability of the said products.

Story update: The Buy Hatke plugin is functional again for Flipkart