In 2007, when Flipkart — the posterboy of India’s e-commerce industry — received its first order for a book, it offered a 10 per cent discount to the buyer. While that discount may not have been part of an effort to drive sales at the time, the online retail industry has since heavily depended on discounts as a strategy to expand its consumer base via sales which are announced every few months
More often than not the burden of discounts is borne through funding received from venture capitalists and private equity investors — a point raised by traditional retailers that led to the commerce ministry disallowing online marketplaces from offering price reductions on goods listed on their platforms. However, this hasn’t stopped discounted products from being available on marketplaces
One of the leading e-commerce companies in Mumbai named ‘RasteKaMaalSaste.com’ has experienced a shocking trend in recent days. On one of the week days, it forgot to announce biggest sales on its website, and to every one’s surprise, sales on that day were maximum. The senior management held discussions regarding the same and came to the conclusion that most customers think that prices of discounted goods are way too inflated and it is better to sell them at normal prices rather than attracting customers through non-existent discounts.