Amazon, Flipkart, Snapdeal Cannot Promote Festive Season Sale; They Are Violating FDI Norms – CAIT

Confederation of All India Traders (CAIT), which is an influential body of offline traders and retailers has complained to Ministry of Commerce regarding heavy discount sales and offers promoted by portals like Flipkart, Amazon and Snapdeal.

In a statement issued by CAIT, it was claimed that such portals are violating FDI norms in India, as these are just technological platforms for enabling ecommerce transactions; and are not retailers themselves.

Considering that both Amazon and Flipkart have started their 5 day long online shopping bonanza from today, the timing of this statement and complaint holds major significance. In case the Ministry of Commerce finds that these heavily promoted festive season sales are violating FDI norms, then they may even ask these ecommerce biggies to stop these sales offers.

Without naming any particular ecommerce portal, CAIT alleged that the heavy promotions on newspapers, social media and electronic media by “these companies” are equivalent to retail trading; something which is not permitted, considering that they are only technological platforms. Hence, they are openly violating FDI norms.

CAIT said, “These companies claim to be a marketplace and therefore can provide only a technology platform for the sellers who are registered with them. Since ownership of inventory does not hold by the said companies they can not offer ‘sale’ or ‘Discounts’ in totality on their online portals but they are doing so which also establishes that they are not marketplace and as such openly flouting FDI policy.”

CAIT has already sent their complaint to Department of Industrial Policy & Promotion under Ministry of Commerce, and demanded that not only these sales and discount offers be asked to stop, but also these companies should be investigated for violating FDI norms.

As per initial reports coming in, Flipkart’s Big Billion Day has already enabled sale of 10 lakh products in the first 10 hours of the day. And considering the buzz and hype generated by both Flipkart and Amazon India, it is expected that the sales volume will increase in the coming days. (although there are few complaints from users, regarding the sales pitch, and continuous trouble with app-only shopping experience)

In case Ministry acts on this complaint and orders ban on such activities, then it can be a major dampener for e-shoppers.

We will update you as more details come in.

Flipkart, Snapdeal, and Amazon have covered their bases, but will the sale-season be glitch-free?

It is that time of the year again when all our wallets get much lighter. Top e-commerce portals have begun wooing consumers with deep discounts and special offers as part of their pre-Diwali mega sales. Flipkart, Amazon, and Shopclues are among the marketplaces that are launching pre-festive season sales on Tuesday with discounts of up to 80 per cent. Snapdeal already had its Electronics Monday Sale on the 12th.

A similar sale last year was overshadowed by glitches. While Flipkart’s problems hogged the news cycle, Amazon and Snapdeal too faced issues especially with orders getting delivered. This time, all e-commerce marketplaces assert that they are better prepared and shoppers will have a smoother experience and that will lead to better sales performance for the sites.

Great expectations

Already Snapdeal has claimed, at the time of writing this article, that it is on track to reach $100 million in sales in a single day from its Monday Electronics sale on the 12th.

“Going by the customer response to the previous two events that we hosted this year, The Great Indian Festive Sale is going to be historic for us,” said Samir Kumar, VP Category Management, Amazon India. The Amazon sale is scheduled for 13th to 17th of October, the same period as Flipkart’s Big Billion Days sale. “We expect millions of new customers to shop on the sale and experience Amazon.in for the first time.” Samir said he expects over 60% of the new customers to come from tier-II and tier-III cities and towns.

While Flipkart’s sale is only on the app, Amazon and Snapdeal have the same deals across web, mobile site, and app. Samir said he expects over 10 percent increase in the number of customers shopping on the Amazon mobile app. All three sites see mobile contributing over 50 percent of overall transactions, with Flipkart and Snapdeal claiming over 75 percent of sales through mobile. Flipkart has not shared its sales target, however, reports state that the company is expecting over Rs 3,000 crore. Its subsidiary, fashion retail app Myntra, is targeting to ship 600,000 packages during the period.

A Snapdeal spokesperson said the site would offer mega deals every Monday across categories but there will be deals throughout the month until Diwali. “We see a huge number of new customers adopting e-commerce each Diwali. Though one would expect, the demand to taper off after the festive season, but each Diwali sets a new normal,” the spokesperson said.

It is not just the biggies who have high hopes from the sales during this period. Cashback and coupons site CashKaro is expecting Rs 300 crore in Gross Merchandise Value or total sales between October and December—the country’s festive season. It has special offers between 13th and 16th to coincide with the sales on the marketplaces, with offers on over 800 sites.

The sale period and the festive season is not just about offers and deals. “This particular festive season is going to be a very important milestone for all e-commerce players,” said Arvind Singhal, Chairman of retail advisory service provider Technopak. “For the big players in marketplaces—Flipkart, Snapdeal, Amazon, Paytm, and Shopclues—this season will determine who is really the number one and who is gaining the market share and who is losing. None of these players would want to seem like they are losing market share.”

Will the festive season sale change this ranking, decided by YourStory readers?

How prepared are the sites?

While last year, Flipkart and Snapdeal claimed to have clocked Rs 600 crore each in sales in a day, tech glitches and delayed deliveries resulted in negative publicity and angry customers. The marketplaces seem to have learned from last year’s experience. Flipkart has set up additional data centres, has seen a 3X increase in capacity in the past six months and got additional call centres on board to handle additional customer service calls. It is also offering additional services to employees to ensure smooth shopping experience. The move to spread the sale across five days is seen as a smart move by merchants. What is more, the company is staggering deals on certain categories to ensure the numbers on the app are more manageable.

Snapdeal has had sales on and off most months during the past year. This should have helped them test out their systems. The company said it has worked closely with its sellers to help them with inventory planning for the festive season, including enabling them to access working capital loans through their Capital Assist platform. The Gurgaon-based company has also invested heavily in logistics. It announced a $20-million investment into e-commerce logistics player GoJavas earlier this month. The company said it has invested $100 million in the last six months to improve its delivery timelines.

Amazon too has invested in its last-mile capabilities. It recently launched eight new Fulfilment Centres (FCs), as it calls its warehouses. It now has 21 such centers in 10 states, covering a total area of over two million square feet with a storage capacity of over five million cubic feet.

So will things be perfect this year? Technopak’s Arvind’s answer: “I am sure there will be glitches this year also, because e-commerce is still work in progress.”

Courtessy : YourStory.com

Flipkart to pamper employees for smooth ‘Big Billion’ sales

Flipkart is unleashing its five-day pre-Diwali ‘Big Billion Days’ sales tomorrow and it is not just online consumers who are being pampered. Bengaluru-based Flipkart has taken measures to ensure that its employees, who are the ones who will ensure that the sales happen smoothly, are taken care of and are at the top of their game throughout the sale period of five days.

The company shared that it is offering breakfast, lunch, dinner and all-day short eats on all five days. Employees, many of whom will be in office round-the-clock, will have sleeping and shower facilities. They will also have shuttle service till 7pm; vehicles for pick-up and drop. Security personnel will accompany women employees travelling after 8pm.

This is not all—there is even 24X7 ambulance service for those who find the stress a little too much and masseurs on-call to soothe tired muscles.

These are just some of the steps Flipkart has taken to ensure that the problems of last year are not repeated this time around. Last year, Flipkart had a single-day ‘Big Billion Sale’on October 6. It hit sales of $100 million; Snapdeal, which also had a sale, declared similar sales numbers. But snags, site collapses and other issues on Flipkart overshadowed the sales.

The deals stopped within seven hours—by 2pm—as the traffic was too huge. About 3,00,000 orders were placed in the first six hours, but social media was flooded with complaints of the website crashing, and prices being raised to make the offers look better. Beside the technical errors, many products being out of stock disgruntled consumers. Flipkart’s Founders Sachin Bansal and Binny Bansal, in fact, tendered an email apology to its customers the next day.

This time around, India’s top online retail site is not taking chances. An executive, who did not wish to be named as he is working closely on the sales, said additional data centres have been set up to ensure that the app—this time it is an app-only event—stays up. “We have learnt from last year’s experience. We did $100 million in one day and would have done more if there were no issues. Considering the preparations, the mood in the office is very upbeat,” said the executive.

Among the preparations are initiatives meant for sellers participating in the sales, like helping them hire trained manpower and providing training to manage high demand. Flipkart has also invested heavily in logistics in recent months. It opened a five-lakh cubic feet warehouse exclusively for consumer electronics and durables earlier this month. “With Flipkart Big Billion Days just around the corner, the new warehouse will help us improve the productivity and meet the anticipated demand during this period,” Binny Bansal, COO & Co-founder of Flipkart, had said at the time of the warehouse’s launch.

The merchant and employee support Flipkart is providing shows that the over $15-billion valued Unicorn means business. Tuesday will show how truly well prepared Flipkart is.