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Indian e-tailers Sale Offers: An Analysis for MBA students

Nov 12, 2014 16:00 IST

    Snapdeal had a flash sale on 11th November following the format which Alibaba and to some extent even Amazon did. Snapdeal had a sale in an hourly format where every hour, there were different products on offer at a discounted price. Amazon.com too had an hourly sale with products on offer on the prices of Rs. 11; Rs. 1111 and Rs. 11,111 but it was available only for the App users. Alibaba on the other hand had a “Double -11” sale but not specifically for Indian markets. Previously Flipkart had a “Big Billion sale” launched before Diwali (23rd October 2014) which did not go very well with the customers.

    Flipkart claimed that it has sold products worth $100 million (over Rs 600 crore) within 10 hours of its Big Billion Day sale, while Snapdeal marked its Diwali sales at Rs 1 crore a minute — which nearly results into a figure similar to Filpkart’s. While Alibaba managed to sell goods worth $8 billion in its Single's Day sale. Alibaba has been running the “Duble 11” sale since 2009 and it is very meticulously planned and executed.

    User Review: Many users complained of price manipulation, products not being available in enough quantities, website being crashed and an inability to complete transactions after adding products to cart. Interestingly a few gained out of these sales also, who obviously enjoyed every bit of the sale.

    Probable reasons for the lag:

    • Technically not proficient – Indian e tailers are not ready technically to withstand the load and “online footfall” which comes on such sale days. This leads to servers crashing and thus a bad user experience.
    • Self adjusted product pricing – It is a very competitive market. Deciding the price yourself may result in haphazard pricing and non uniformity.
    • Claims vs. Final execution Sometimes the print ads show appealing but misleading offers as seen in these sales. It is important to coordinate well to avoid the mismatch.

    What is at Risk?

    • Loyal customers – Customers, who have been loyal to one website, may lose the trust and thus stop buying from that website completely after a single bad experience.
    • Bad name in the market – If the company does not meet the claims and expectations, it will result in lot of back-lashing and thus a bad brand name and value.
    • Government intervention – Many vendors complained against Flipkart after they nearly spoiled the Diwali bumper sale which happens otherwise. It was claimed that Flipkart had to pay heavy fines in turn. It is a huge risk.

    Some of the User Comments:

    • Dear @snapdeal , please don't take your customers for a ride? Pathetic website never opens!! - The King of Queens (@vishysblue)
    • Snapdeal ads on TOI front page, TV, Radio etc. Should have used some of that ad money to upgrade their servers for today. - Aditya (@forwardshortleg)
    • @snapdeal do your SALE means ""not available "" - Sagar Doshi (DSK)
    • Kya re Flipkart? Your MacBookAir 13" is Rs.56,490 and Snapdeal has it at Rs.49,999! - Karthik Srinivasan
    • At this point, Flipkart should start selling servers for cheap, considering how frequently I see "Internal Server error" - Ashok

    Indian e tailers need to go a long way to match the international standards.

    Click here for more Case Studies

    DISCLAIMER: JPL and its affiliates shall have no liability for any views, thoughts and comments expressed on this article.

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