Indian eCommerce industry hopes Diwali will light up sales

The Indian eCommerce industry is leaving no stone unturned to woo customers in the upcoming festive season. They are offering additional 5% discount, cash back and wallet points to its mobile users to ensure user engagement and boost sales.

Srinivas Murthy, senior vice-president for marketing at Snapdeal said, "We are developing a host of solutions for our 1.5-lakh sellers to help them pre-empt demand through analysis of consumer behaviour and stock-up their inventory accordingly.” The company’s traffic grew 15 times ahead of Diwali last year.

The eCommerce companies this year are eying to score the highest gross merchandise volume (GMV), a key metric for continued investor interest in the space.

ShopClues senior director Nitin Agarwal has said, "In the campaign starting next month, there will be differentiated offerings for loyal customers. We have started working with cash back and loyalty programs through Cluebucks, which can be redeemed for future transactions. As opposed to previous years, the assortment cover has gone down and only certain categories get promoted."

Paytm, a transaction platform, however, plans to promote wallet downloads. The company’s vice-president Saurabh Vashishtha says, "Discounts combined with attractive cash backs will be offered. The actual benefits would vary for different categories."

"From last year, we see a lot of tier-2 ecommerce players tying up with wallets such as Mobikwik and PayU to offer wallet points as incentive to online shoppers. The focus has shifted from discounts directed at acquiring customers to promoting newly on-board merchants through discounts," said Ashok Reddy, founder of couponing site, GrabOn.

If reports are to be believed, Indian users are not loyal to the online marketplace; the reason being, instant benefits available by couponing and cash-back deals.

"We have seen the minimum order value on flat-out discounts go up over the years and the discounts are conservative at 20-30%. In India, loyalty points are not generous, as a result of which the uptake by online buyers has been slow," said Swati Bhargava, cofounder of cash back site, CashKaro.

"There has been a move by horizontal marketplaces to move from discounting to loyalty programme, though none of them have been successful. The reason being that unless it is synchronous, they will lose customers to the competitor offering flat-out discounts," said Arvind Singhal, chairman and managing director of retail advisory firm, Technopak.

Massive discounts will also be driven by new segment of consumer internet companies. "Food tech companies will be among the new players in discount space," said Ankita Tandon, COO at couponing site, CouponDunia.

Image: Thinkstock