India Online Retailers Fight Price Discounts To Burn Up 30% Revenue

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(India), Flipkart, Snapdeal and Jabong and other electricity supplier companies' business is growing rapidly, and traditional entity retailers are also unable to resist the need to launch e-commerce business.

In addition to selling products on their own official website, they also cooperate with the third party e-commerce platform.

However, these retailers are offering

After that, the days were not too good, because the fierce competition in online retail led to the high cost of discount sales and attracting customers.

Kishore Biyani, the CEO of the future group, estimates that Internet retailers use 20% of their sales to get customers and 30% to offer discounts.

According to the February 5th report, large entity retailers Shoppers Stop and Lifestyle & Spencer began selling products online.

In the next few weeks, Shoppers Stop will sell its own brand products including Stop and Haute Curry on the major e-commerce platforms.

The goods will also be pushed to the Internet.

At the same time, Shoppers Stop intends to launch some products that are specifically sold online.

Another retailer, Lifestyle & Spencer, will also launch online business in 2015. At present, the retailer has decided to sell goods on official online mall and third party e-commerce platform.

During the festival last year, with the double promotion of large discounts and heavy advertising, Amazon, Flipkart and Snapdeal business grew rapidly, attracting many traditional retailers to embrace the electricity supplier.

According to Kishore Biyani, CEO of future group, the cost of acquiring customers by Internet retailers will account for 20% of sales, and 30% of sales will be used to provide discounts.

In 2014, the future group announced that it would sell its own brand products on Amazon platform.

"Therefore, no matter what their total revenue is, they will spend 40% to 50% of their income on providing discounts and getting customers."

He said.

Shrikhande, who is working in Shoppers Stop, estimates that at the end of last year's key shopping season, in order to attract consumers, e-commerce companies invested $600 million in offering discounts.

He said that in the quarter, the advertising cost of the electricity supplier reached 3 billion rupees, while the advertising expenditure of physical retailers was between 150 million rupees and 200 million rupees.

In the shopping season, Shoppers Stop's revenue fell by 20% to 140 million rupees due to the direct impact of the electricity supplier.

In 2014, the number of days when Shoppers Stop sold goods online increased from 34 to 65 to 70 days, almost double.

The change is due to the early arrival of the online sales season, and online peers offer preferential discounts.

Lifestyle also increased the number of online sales by 7 days last year, probably unchanged this year.

Online retailers are fighting for a discount, coupled with a weakening consumer demand. Most traditional retailers advance the end of the season sales from January 16th to the last week of December, while the other end of the season promotions also moved from mid August to the end of July.

Shrikhande said that online retailers' online sales strategy has brought chaos to the development of the whole industry.