Amazon, Flipkart and others to offer heavy festive discounts

Image: Shutterstock

This festive season, ecommerce companies could increase discounts and offer attractive payment options like no-cost EMIs or rebates on debit and credit cards across a larger selection of merchandise to beat the slowdown in spending. Festive sales are a crucial part of any ecommerce company’s calendar and account for at least 20 to 25 percent of their annual gross sales.

Flipkart recently said it has increased the reach of its flexible payment schemes such as Pay Later and Cardless Credit by three times as against last year’s festive sales. Pay Later allows consumers to shop through the month up to a certain limit and pay a consolidated bill. Cardless Credit has a limit of up to `1 lakh, payable in instalments.

Similarly, Amazon India’s festive sale has a tag line, “Now budget won’t hold back India’s celebration”. The company will also offer a wide range of financing options and cash back offers. “If the sales have to grow proportionately this festive season, the middle India participation becomes crucial. For that to happen, financial engineering is required. Etailers want to seed the idea that you may not have significant money to spend, but we will work around the finances so that you can afford the product,” says Anil Kumar, chief executive at Redseer Consulting. He expects online sales to touch $32 billion in 2019 from $24 billion a year ago. 

Satish Meena, senior forecast analyst at Forrester Research, expects festive sales this year to grow by 20 percent to about $3.5 billion. Etailers had posted about 50 percent growth in festive sales in 2018, over 2017, he estimates. “Etailers want to nudge the customers to purchase online, and not offline. They are targeting household upgrades like TVs, refrigerators, and washing machines.”

Meena also expects etailers to spend more on discounts to drive sales in the next couple of months, especially after the first half of the year remained slow. “There has been a general slowdown in spending and consumers are postponing purchases. Impulse purchase isn’t happening as much either.”