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Flipkart, Amazon, Snapdeal claim huge festive sales; consumers complain about `no discounts'

It is festive sales bonanza time online and e-commerce players are going all out to woo consumers for first five days in October. Almost every major player has come out with announcements on the bumper success the scheme has been since it was launched on October 1, which was contrary to the complaints of consumers on social media ranging from there being `no discounts' and glitches.

Each of the top online players like Flipkart, Amazon and Snapdeal made announcements on the units sold per hour after opening the site for discounts. Early trends showed a huge jump in demand for mobile phones, appliances, personal electronics and furniture items.



Snapdeal and Flipkart claimed lakhs of transactions on their platforms on the first of the 5-day discount sales on Sunday. Amazon, which started its 5-days special sale on October 1, said it has seen 6 times growth over its regular business. It has claimed to have sold 1 lakh product units in first 30 minutes, 15 lakh units in first 12 hours on first day of the 'Great Festival Day' sale.

Snapdeal, in a statement, said, "Nearly 11 Lakh buyers from over 2,800 cities and towns across India bought at
Snapdeal in the first 16 hours of the sale. The sale which started at midnight with 180 orders being booked per second got bigger during the day as buyers used the national holiday to explore a plethora of attractive deals." It said that based on the trends from Day 1 of the sale reflect sales volume jumping 6 times of average volumes by 4 PM on Day 1.

Flipkart claimed that it sold over half a million products within one hour on Day 1 of the sale. "Within the electronics and gadget category, we sold more Apple watches in 10 minutes than the total sale of Apple watches online and offline in a month," Flipkart said in a statement.

Snapdeal and Flipkart claimed they were providing products at large discounts.

Flipkart said that the number of product units sold in the first 6 hours of sale surpassed the total units sold in a day during the first day of its The Big Billion Days in 2015. Snapdeal is running the sale as 'Unbox Diwali'. Flipkart further said that its subsidiary Myntra also clocked three times more revenue in the first hour compared to 2015 edition.

Going by GMV figures, India’s retail market is around $500 billion while the online share was at $10 billion in 2015 and is expected to be in the reach of $18-20 billion in 2016.

China had a retail market of around $650 billion in 2015 and is expected to be worth $10.3 trillion by 2018, compared with the $5 trillion in sales projected for North America, according to a PwC report. The overall market of retail in China is about $2 trillion.

No discounts, say consumers
Meanwhile, consumers on Twitter complaint that there were hardly any discount on the products that these companies are offering.

The online shopping festival of Amazon, Flipkart, Snapdeal is more about discounting myth, marketing gimmick without much substantial offers, said a twitter handle. However, the authenticity of the claims on micro-blogging site could not be verified.

Some consumers even posted screenshots showing that a product was priced higher on the sites they were shopping on compared to the other sites.

Some media sites and Twitter accounts complained about glitches in Flipkart and Amazon payment gateways. Amazon
displayed on the site that "SBI and Associate banks netbanking are having payment issues".

In a response to the queries raised, Flipkart spokesperson said: "We saw an extreme spike in traffic leading
to a slight interruption in the payment gateway. But The Big Billion Days extravaganza continued, and saw customers
stacking up products in their carts and making the most of other payment options such as cash on delivery."

According to senior official of SBI, the "site of the bank is fine and working".

Violation of FDI policy
Meanwhile, traders' body CAIT said that "big sales" on e-commerce sites is a "blatant violation" of FDI policy.

"Once again the online retailers have begun their agenda to flout the FDI policy right under the nose of the Government and it is sad that no action is being taken against them for violation of the FDI policy," the Confederation of All India Traders (CAIT) said in a statement.

This is the second time after the release of FDI policy 2016 when such violations are openly done by online retailers and CAIT will approach Prime Minister and Finance Minister against these sales, the statement said.

"As per FDI policy, it is clearly established that online retailers who have received FDI will act as marketplace only where they will provide technology platform and in no way they can influence the prices and also they are under obligation to maintain level playing field," CAIT said.

The online players are violating norms, said experts earlier to Firstpost. Devangshu Dutta, Third Eyesight – a consulting firm that focuses on the retail and consumer products ecosystem said, “Most of the internet companies have raised funds from venture funds and private equity which are funds sourced from overseas. Domestic players say the marketplace has created a clever structure and the latter is sidestepping or bending the law. The government has been looking at the situation for the last two years and have been looking at attracting FDI. When the government comes out with more conditions, it means more restrictions and then there are more interpretations. However, the fact is what is needed is a level playing field.”

How will the government address this issue? As of now, the government seems to be finding it difficult to make up its mind on the issues regarding the online retail sector.

(With inputs from agencies)

Updated Date: Oct 03, 2016 12:49 PM

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