India’s Heavy Festive Discounts: Boon for eCommerce or Bane for Small Retailers

Although these deals are surely attracting customers and fetching their attention, CAIT has criticized this action by eCommerce giants and claimed that they are undermining small retailers. 

“Ecommerce platforms use consumer behavior data to offer personalized deals, targeting the right audience at the right time, thereby ensuring higher conversion rates. Their ability to predict demand trends and manage inventory efficiently also allows them to offer large-scale discounts without compromising profitability,” stated Puneet Kumar Kanojia, Director of BollyBites VadaPav.

Ecommerce platforms can justify their Big discounts using smart tools like consumer data, cost-effective marketing, and efficient inventory management. This way, even without facing any loss, they can offer heavy discounts.

It would not be fair if we don’t state that YES some small businesses do gain from the extra visibility provided by these eCommerce platforms. But, many are struggling to keep up with the fierce discount fight. 

According to Ravi Kabra from Skippi, premium products might not be as affected, but smaller players often feel the pressure. He said, “The discount wars can pose challenges for small businesses, which often struggle to compete with the substantial discounts provided by ecommerce giants. However, small businesses like Skippi are less impacted because of their unique status as a premium natural product. Nonetheless, the ongoing expectation for discounts can squeeze profit margins, particularly for those heavily dependent on online platforms.”

The debate has sparked calls for a cap on discounts. However, industry leaders suggest that rather than a strict limit, transparency and fair competition should be the focus. 

According to Rakhi Sharma, Vice President of Marketing and Ecommerce for Jovees Herbal, “Regulations that promote transparency and fair competition would benefit all players, including small businesses. However, it's important to maintain a balance, so consumers continue to enjoy the benefits of competitive pricing. We believe in a cooperative approach where platforms, businesses and the government work together to create a marketplace that is both fair and dynamic”. 

While government intervention could be tricky, it might help regulate pricing strategies to protect small businesses without taking away consumer benefits. 

Experts suggest that a better approach would be for platforms, businesses, and the government to work together. By collaborating, they can create a fair marketplace where everyone, big or small, can compete and thrive.

Also read: Festive Season Hiring eCommerce Mega recruitment