And the e-commerce war continues…


MUMBAI: The day began with one of the most interesting ad wars on the front pages of leading newspapers of recent times and ended, on one hand with Flipkart apologising to its customers even after clocking $100 million in 10 hours while on the other hand Snapdeal, making a crore per minute, scoring its highest sale in a single day.

Even though the fight for the market share between e-retailers has been going on for some time now, the day 6 October seems to have made history in the e-commerce space with discounts and deals never heard of and the impossible to miss marketing by the e-commerce sites. The day signals the start of a marketing war that is set to intensify in the months to come.

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. Though it did not turn out the way it was supposed to.

The sale not only affected the home-grown brand Flipkart, it also impacted its competitors like Amazon and Snapdeal majorly along with Indian retailers like Future group. The Confederation of All India Traders (CAIT) has also launched a probe into the sites and the government may also launch a separate policy for the sector soon.

According to Trust Research Advisory (TRA) CEO N Chandramouli the Big Billion day sale was merely a catalyst to a situation that has already been simmering for a while. “It is essential that the government looks into the matter as with the absence of legislative measures the online retailers exist in a state of anarchy,” he says.

Talking about the Big billion day fiasco, Chandramouli reckons, “The Big Billion day fiasco definitely has coloured the perception of people negatively. If this has not awoken all the e-commerce brands to ensuring they tighten their systems before embarking on such an offer day, then there will still be trouble.”

“On the other hand, this fiasco must have also strengthened the resolve of competing brands to prove that they will stand true to their promises, ensuring that their promise to the consumers is always met,” he adds.

Chandramouli feels that mature players like Amazon were the gainers in this fiasco backed by their years of experience and learning. “Everyone other than Flipkart has benefitted from this fiasco. The competition is being trusted more and Flipkart’s stranglehold is being broken, the consumer has got some good deals and they benefit too,” he points out.

Team Pumpkin business head Swati Nathani has a different view. She says, “We did see complete social media backlash for Flipkart on 6 October and assumed that the e-commerce giant will definitely not achieve the targets set by itself. However, at the end of the day, we did see Flipkart breaking all records and emerging as a clear winner. Despite that, the co founders sent an apology note to all the customers. In our opinion, Flipkart has gained more than it has lost after the fiasco.”

When it came to ads, none of the e-tailers were behind. With Flipkart’s ‘Big Billion Day’ sale ads flooding the pages of major Indian newspapers, Amazon’s response alluded to India’s recent successes in space with its “Mission to Mars” campaign, while Snapdeal tried to play it cool with a pitch that ran with the tagline ‘For others it’s a big day. For us, today is no different’.

The statistics show that a combination of #Flipkart and #BigBillionDay received approximately 57,600 mentions versus 15,000 mentions for #CheckSnapdealToday. #Flipkart and #BigBillionDay collectively received approximately 2,137 million impressions across Twitter, while #CheckSnapDeal received around 859 million impressions. Emotions favoured Snapdeal where it received only seven per cent negative sentiment mentions compared to 23 per cent for Flipkart. The conclusion could be that while Flipkart got the numbers, Snapdeal, even with the smaller numbers it could manage, kept customers happy.

And now, even after the dust has settled on the 6 October fiasco, the ad wars continue.  As Amazon now comes up with its latest Diwali Dhamaka sale, Snapdeal continues with its trending #CheckSnapdealToday tagline. Full page back to back ads can be viewed in leading newspapers like the Times of India.

Even as customers continue to shop with sites offering astonishing discounts, the retailers and the government have started expressing concerns over huge discounts being offered by e-commerce firms.

While Chandramouli believes that there are only two possibilities in such cases, firstly that the offer is coming from manufacturers or the e-tailers are absorbing the losses of the discounts.

“Either way, it is not sustainable. If the objective is to pulling in new e-buyers by offering them unheard of discounts, it will help, but it only builds the entire market, not loyalty to any particular brand,” he opines.

Nathani reveals that the current focus of e-commerce players is more to gain the market share in customer mindsets rather than profitability. “Jabong has incurred a net loss of Rs 293 crore in the last fiscal year. So we would say that the e-tailers will even sell products at a loss to ensure that customers keep returning to them. Customers, therefore, are at the best spot right now in terms of advantages,” she says.

But even with the losses, the discounts do not stop. “E-commerce is a rapidly growing sector and often due to the absence of a physical manifestation of the store, online advertisers tend to promise in superlatives,” says Chandramouli.

Adding to the same, Nathani reckons, “Customers expectations have definitely risen in terms of discounts. For eg Snapdeal offered iPhone 5S for Rs 24,999 in its newspaper ad and now, this price has become benchmark for the customers who are looking out to buy the phone.”

According to the pre-dominant consumer sentiment, Flipkart which holds 50 per cent market share in the Indian market may have to now work harder to get its back after the fiasco.

Though, she clearly believes that In terms of numbers and reach, Flipkart is the clear winner currently.  “But with the constantly evolving strategies, they see Snapdeal getting closer to the top spot soon.”

But with Diwali coming near, it would now be interesting to see how the #bigbillionday fiasco will or will not affect the sales of the portals and how prepared they are to give their customers a good time. But till they #happyshopping.

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