Is there e-shopping beyond discounts?

Rajalakshmi Nirmal | Updated on January 20, 2018 Published on April 17, 2016

Rajalakshmi Nirmal talks to shoppers to find out why they will stop or continue buying online, if e-commerce companies stop discounts

Anjali Godyal from Gurgaon swears by online shopping which, she claims, is far superior to in-store buying. But there are many others who have been drawn to e-commerce websites mainly by the large discounts.

These discounts can now whittle down as the Centre has ruled that e-commerce companies operating the ‘marketplace’ model can’t influence the price of goods.

This means that players such as Flipkart or Snapdeal should stop offering large discounts and end their predatory pricing strategy to acquire clients. They can act only as a platform that connects buyers and sellers and facilitate sales by providing logistics and payment services.

In one way, this is a good move as it will moderate the unsustainable discounts currently being offered by e-commerce companies, using the funds pumped in by their PE investors. But there is also a fear that Indian consumers may now go back to their neighbourhood stores.

In an online survey by BusinessLine, to which over 850 people responded, 65 per cent said they will stop shopping with online retailers if there are no price discounts. So, we talked to a few of them to find out why they will stop or continue buying online, if e-commerce companies stop discounts.

Loyal online buyers

In BusinessLine ’s survey, of the people who said they will continue to buy online, a majority said that they prefer online buying due to the ease of shopping.

Padmavathi Arun, who perfectly balances work and home to the envy of many colleagues and friends, says she has been ordering essentials for her home online for the last many years and will continue to do so for the sheer comfort of purchasing things without stepping out of the house and for the sheer variety of products.

Padmavathi’s first online purchase was in 2008 and she vaguely recollects that it was a book and it was bought on Flipkart. Today, she buys a whole lot of things online — from clothes to fashion accessories, stationery and gifts. One more reason why she isn’t worried about the end of discounts is that she doesn’t buy expensive things online and the 10-20 per cent discount on the home essentials or the clothes that she buys is hardly any savings, she says.

The other comfort of shopping online is the simple ‘return policy.’ Kavitha, a young homemaker who has just put her four-year-old son in kindergarten, says she buys clothes for her son online. Once the outfits are delivered, she tries them out on him and if not happy, just returns them.

Physical stores have strict policies on return, especially with regard to clothes. While many clearly state on the bill itself that they will not entertain ‘returns’, some specify the day and the time by which they allow customers to bring up issues regarding purchases already made. With e-tailers, however, it is as simple as clicking a tab on the app and giving your preferred time and day for pick-up of the parcel.

Voting for physical stores

Of course, there are those who are concerned over lack of discounts. N Sivakumar, an investment manager, who buys electronic gadgets online, says he may actually prefer to go to stores in the neighbourhood if there are no discounts in online stores as he can at least touch and feel the product. In fact, he says, there have been many times when he has visited mobile stores in malls and after choosing which one to buy, gone online and bought it on Flipkart or Amazon.

Nilay Arun, a sports enthusiast and an entrepreneur, however, says that he may still buy things, like his sport shoes or other expensive stuff online, as e-tailers may still offer attractive prices, given they do save by having no investment on physical stores or ground staff.

It is true that there is a lot of saving potential by running a business on the internet, and these savings can be passed on as discount.

A 5-10 per cent discount can be ₹1,000-2,000 on pricey things such as a professional camera. But Nilay also says that if discounts are not offered he may then buy his groceries from the next door vendor as delivery will be quicker. Now he buys from grocers because he gets cash-back offers on Paytm.

E-tailers have been trying to attract the attention of consumers not just through steep discounting but also through coupons, cash-back offers, and cross-promotional offers.

Now, sans the ‘dhamaka offers’ and ‘promo codes’, will e-tailers survive?

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