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Flipkart, Snapdeal, Amazon go on war of offers this Diwali

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Flipkart, Snapdeal, Amazon go on war of offers this Diwali

Starting today, online retailers will offer big discounts andengage in a pricing war as they try to outdo each another in the race to generate record revenues.

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Image: mxmindia.com

Bengaluru: Starting today, online retailers will offer big discounts, engage in a pricing war, create cheeky ads on social media and poke fun at their rivals, as they try to outdo each another in the race to generate record revenues in the most important sale period of the year.

Snapdeal, the second-largest online retailer, is holding an electronics sale on Monday, offering discounts on smartphones, laptops, other electronics and home appliances.

India’s largest e-commerce firm Flipkart will go head-to-head with Amazon India this week for online sales of smartphones, tablets, clothes and other products.

There is increased pressure on Flipkart and Snapdeal to generate bumper sales this Diwali after revenue growth at these companies slowed in the first quarter of the fiscal year. The festival period quarter, including Diwali, accounts for more than half their annual sales.

Flipkart said on 28 September that this year’s version of the Big Billion Day sale will be open for five days from 13 to 17 October and will be limited to its smartphone app.

In response, Amazon India (promoted by Amazon Seller Services Pvt. Ltd) is holding a five-day sale during the same period, setting up a direct battle with its local rival. While Amazon’s sale isn’t restricted to its app, the company will offer higher discounts for app-based purchases.

While Flipkart and Amazon will go head on, Snapdeal (owned by Jasper Infotech Pvt. Ltd) and new entrant Paytm (owned by One97 Communications Ltd) are likely to enter the fray at some point with their own offerings.

Last year, Amazon and Snapdeal rode on the back of Flipkart’s extensive ad campaign for the Big Billion Day and generated their highest-ever daily sales (then) by catering to customers who were put off by the collapse of Flipkart’s website and pricing-related gaffes made by the company.

Flipkart had spent tens of crores of rupees on marketing its one-day Big Billion Day sale last October, touting deep discounts on all kinds of products. The company took just 10 hours to hit its target of $100 million in gross sales (exuding discounts) on the day of the sale, which is inspired from similar shopping events such as Cyber Monday and Black Friday in the US and the Singles’ Day sale held by Chinese e-commerce giant Alibaba Group.

However, Flipkart was unprepared for the rush of customer traffic and the company’s founders Sachin Bansal and Binny Bansal were forced to apologize to angry customers for pushing up prices of some products, cancelling orders, inadequate stock and other glitches. Amazon and Snapdeal ended up as the biggest beneficiaries of Flipkart’s glitches, simply by being there.

Already, executives at Snapdeal and Flipkart have started calling out each another on social media.

On Sunday, Snapdeal product head Anand Chandrasekaran put up a picture of Flipkart’s website being temporarily unavailable. On Twitter, he said, “Guess this is part of the app only strategy.”

A few hours later, Flipkart chief product officer Punit Soni responded, “Anand, my friend 🙂 we were testing our servers to prep for BBD (Big Billion Day). Sorry you had issues. Best of luck for the festival season!”

Source: Livemint. By Mihir Dalal.

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