Diwali Discounts Not On Cards As e-Com Players Look To Protect Profit

BENGALURU: Your eager wait for the ‘Dhamaka Diwali’ online sale might go really bad this time. Four sectors – apparels, footwear, electronics and cell phones won’t go down in price as e-commerce merchants are in plan to protect their profit margins than facilitating with huge discounts alike previous years.

Top notch e-commerce webs like Amazon, Snapdeal, Flipkart and others have informed brands like Apple, Sony, Samsung, Puma and Arvind Brands that no deduct in price will be permitted as it leads to low profits despite high range of sales, reports Economic Times.

Abhishek Ganguly, Managing Director of one of the largest selling online brands in India, Puma India said, "They might make the same noise and spend as much marketing money but discounts will be lower."

This take on the side of e-commerce sites won’t harm online sales in the country, as number of vendors and product categories are on a steep rise.

Senior Vice President (Marketing) at Snapdeal, Srinivas Murthy shared his believe for this festive season. He commented, “This year, we expect Diwali to be a bigger success and are upscaling the platform to manage increased traffic. Our customer as well as seller base have grown phenomenally in the last year and we expect this base to further expand exponentially during the Diwali 2015 season.”

“Ecommerce channels will keep their advertising and discounting measured, and address both the front-end and back-end infrastructure capabilities necessary to handle the demand surge the season brings,” commented Manish Sharma, managing director at Panasonic India.

Flipkart and Amazon India denied talking about this issue.

Industry estimates predict a total expense of Rs 2,000 crore by websites on marketing and discounts in the 2015 festive season.

For major brands the online discount will range between 5-15pct this festive period. Online exclusive brands and private labels that involve bigger margins of profit will put up greater discount rates.

Jacob John, Deputy CEO of Lifestyle department said, "Retailers have been planning well in terms of buying and sourcing merchandise which leaves little room for unsold products." He added, “Also, heavy discounting comes at a risk of eroding brand imagery and positioning.”

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