Flipkart, Snapdeal sell goods worth Rs 600 cr each but real winner is Amazon

In one of the biggest sales days for Indian e-commerce, Flipkart and Snapdeal on Monday claimed to have sold products worth an estimated Rs 600 crore each, even as customers complained about technical glitches, while global e-retailer Amazon continued its own pre-Diwali campaign.

Flipkart claimed it sold products worth $100 million (over Rs 600 crore) within 10 hours, while Snapdeal pegged its sales at Rs 1 crore a minute-- which translates into a figure similar to Filpkart's.

There was no sales figures from Amazon which is running a three-day discount campaign.

"We got a billion hits on our site today and achieved our 24 hour sales target of $100 million in GMV (gross merchandise value) in just 10 hours," Flipkart co-founders Sachin Bansal and Binny Bansal said in a joint statement.

Products under Flipkart scheme sold out by afternoon, social media abuzz with complaints

Sale on Flipkart started at 8 am and most of the products under scheme were sold by afternoon. "The Big Billion Day is an unprecedented day for us as this is the biggest sale ever in India. With a range of exciting offers on quality products at disruptive prices available throughout the sale period, we have created history in Indian e-commerce," the joint statement said.

However, consumers online who were upsince early morning, were left rather disappointed asas the best deals on the website were over within seconds of the sale starting at 8 am. And, within the first 15 minutes, the 'steal deal' section, offering the biggest discounts, flashed an 'out of stock' message.

Screengrab from Facebook

Screengrab from Facebook

Soon enough, Twitter too was agog with stories of dropped orders of "Flopkart".

Complaints ranged from technical errors, to comments on pricing scams, to lack of product variety. The site crashed once due to heavy load,while order placements were marred with glitches. Moreover,ratings and reviews' were missing from many products, nor did Flipkart offer refund or cancellation options on purchases made. Buyers also claimed deals advertised in newspapers were not available on the website. Howeverthe biggest grievance was thatprices on the website were inflated over the past couple of days and therefore the discounts running were not genuine. Some consumers even posted screenshots that justifies their claim.

A blog post titled 'Flipkart's The Big Billion Day-a pricing SCAM' went viral yesterday after it showcased how Flipkart had increased the pricing of products prior to the discount sale and is now selling in discounts in 'Big Billion Day' sale. ( Read more here)

Bigbillionday.com stole the thunder

Add to this the competition.Bigbillionday.com stole the thunder from Flipkart. Users who typed www.bigbillionday.com were redirected to rival www.amazon.in, leading to industry-wide speculation that the global online retailing giant Amazon was behind this ambush marketing exercise even though the companyhas denied any role in this.

Snapdeal too took adig at Flipkart's one day scheme with its tagline-- "Forothers it's a big day. For us, today is no different".

But who will pay for these discounts?

Flipkart offered huge discounts on mobile phones, consumer electronics, gold coins and other merchandise products. Under the sale, Flipkart offered the Nokia 1020 at Rs 19,999 which is about 60 percent less than its launch price.

Similarly, the company offered heavy discounts on books. Some products were on offer at discounts of over 90 percent. Snapdeal claimed it sold 10 products per second acrosscategories between 3 and 5 October but did notdisclose the total sales value.The company claimed it sold a smartphone every 6seconds, laptop every 20 seconds, tablet every 30 seconds,saree every 30 seconds, a pair of footwear every 10 secondsetc.

Such deep discounts implies that margins for both Snapdeal and Fliplark will be negative but investors it seems are clearly backing this strategy of acquiring customers at the expense of the bottomline. What this means is that the aim of the flash sale, was not profits or financial gain but outgrowing competition.

Traders body concerned with huge discounts too, wants government to intervene

Meanwhile, traders body CAIT while expressing concernsover huge discounts being offered by the e-commerce firms askedthe Commerce and Industry Ministry to take steps to monitorand regulate online businesses.

"We invoke your kind and immediate attention to ongoingsale offers conducted by various e-commerce companies sincelast three days...they are offering discounts from 20 percentto 70 percent, whereas traders are forced to sell sameproducts in offline markets at a higher prices since theirpurchase price is on a very higher side," National GeneralSecretary of Confederation of All India Traders (CAIT) PraveenKhandelwal said.

The All India Mobile Retailers' Association, a body that claims to represent the interest of around 10,000 mobile retailers, said it would approach the government and the Competition Commission of India (CCI) to stop such predatory pricing deals by e-commerce marketplaces.

Published Date: Oct 07, 2014 10:10 am | Updated Date: Oct 07, 2014 10:10 am

Also See