Online VS Offline: The Independence Day discount wars

As India readies for its 70th Independence Day, the country’s online and offline retailers have decided to battle it out with a slew of offers and discounts in a bid to make the most of patriotic sentiments of consumers.
The long Independence Day weekend has worked to serve as a spring board for retailers (both online and offline), who have come up with special offers and product promotions to boost sales and footfalls.
While jacket advertisements in newspapers, prime time ad slots on TV channels, pop-ups on computer monitors and constant notifications on mobile phones have become a common sight for online sales, offline biggies are equally prepared to give fierce competition to their online peers this time around.
Take for example Kishore Biyani’s Future Group. The group is expecting to double its sales owing to a five-day shopping event which they are calling ‘Maha Bachat‘. The group is reportedly aiming for revenues equalling Rs 1,000 crore in sales from the event, scheduled for August 13-17, up from last year’s Rs 500 crore.
The group has also come out with ad campaigns where chief executives of brands such as Paper Boat, Delmonte and Prestige are featured. The company has tied up with Axis Bank, which will give five to 10 per cent cash back. Paytm which will give 15 per cent cash back and Bajaj Finserv which will offer free shopping to 100 winners a day.
Read: Brand Factory goes big on social media to celebrate Independence Day
The K Raheja Corp company, HyperCITY Retail (India) has also announced its ‘Annual Home and Happiness Festival’ which will have great discounts and deals on food, home and fashion. It will offer a flat 60 per cent off on a wide range of apparel and footwear and 50 per cent on home products. The company expects double digit growth through I-day sales.
“With great discounts and deals on Home, Fashion and Food, we are committed to spread happiness by offering a potent mix of amazing deals, freshness through new products and giving its customers high value shopping experience in stores. We expect to grow at double digits, like for like in sales this month and are expecting good footfalls across all our stores,” Vice President of Marketing, Loyalty & Visual Merchandising, HyperCITY Retail India Ltd., Manoj Jain, tells Indiaretailing Bureau.
E-tailers I-Day Sales Hit a Roadblock
For online retailers, Independence Day sales every year prove to be a booster shot for upcoming festival season going up to the New years. Through last year’s I-Day promotions, biggies like Amazon, Flipkart and Snapdeal were able to notch up massive gains and customers on its platform.
In fact, the first day of The Great India Freedom Sale were the biggest day in the history of Amazon in India. “The first two days combined were 50 per cent bigger in terms of sales as compared to the first two days of the Summer Sale and eight times bigger than the previous week,” an Amazon India spokesperson has told Indiaretailing then.
Read: E-tailers notch up massive gains, customer acquisitions via I-Day promotions
This year, Amazon.in was the first e-tailer to announce I-Day sales, offering discounts of 20 to 60 per cent on all its product ranges. The company recently said that the Day 1 of the ‘Great Indian Sale’ was the biggest ever for Amazon India. Customers flocked Amazon.in to grab deals right from the word go, with the first 100,000 units sold at midnight.
Amazon rivals, Snapdeal and Flipkart has also launched their sales. Delhi-based Snapdeal has kicked off its eight day long ‘Wish for India Sale’ offering a discount of up to 70 per cent on its products. It will also offer wish lists for India with Snapdeal on all social media platforms. The most popular wishes will be published on August 15.
Meanwhile, India’s largest e-commerce firm Flipkart is not far behind the competition and has launched ‘The Freedom Sale’.
However, online sales have irked India’s premier traders body, Confederation of All India Traders (CAIT), which recently filed complaint against online marketplace biggies with the Department of Industrial Policy & Promotions (DIPP) alleging FDI violations by e-commerce firms.
“Under the FDI policy online marketplaces cannot undertake retail trading activities but these e- commerce portals being habitual offenders of government policies, are circumventing the law and engaged in B2C activities which is prohibited for e commerce marketplace portals,” said the industry body in a statement.
In a complaint sent to DIPP, CAIT has demanded that not only these companies be restricted to conduct such sales events but the operation of their respective portals should also be stayed.
According to National President CAIT, BC Bhartia, and Secretary General CAIT, Praveen Khandelwal, these e- commerce portals are circumventing the law and engaged in business to consumers activities which is not allowed for e-commerce marketplace portals.
According to new FDI rules introduced in March this year, DIPP had classified the marketplace model as a B2B activity in which 100 per cent FDI was allowed. But this also meant that a marketplace could not directly or indirectly influence the sales price of goods or services or offer discounts and no vendor should account for more than a fourth of total sales – something that is bound to be a dampener this sale season.