E-commerce merchants expect festive-sales windfall
Festive season e-commerce sales are back; but this time, the merchants selling on these platforms are more at ease. The sellers YourStory spoke to said the online portals have not forced any major discounts on them this time, but they expect a large set of new customers and higher visibility.
Flipkart is launching its Big Billion Day sale on Tuesday and it will run till 17th. Amazon is running its Great Indian Festive sale during the same period while Snapdeal will have a special deal every Monday alongside offers through the month until Diwali. At the time of writing, Snapdeal claimed to be on track to reach $100 million in sales in a single day from its Monday Electronics sale on October 12th.
Kuberbox, an online seller for diamond jewellery, participated in Flipkart’s Big Billion Day sale last year, and saw the same momentum in sales for the next two months. “Once your product sells well on a marketplace platform, you are shown higher on their website. Even if you are selling on low margins, it helps you to get more visibility for your brand and your customer base will increase substantially,” says Sourav Lodha, Founder of Kuberbox.
More popular brands such as YepMe, however, have different expectations from the festive sales. "During sales on these sites consumer activity goes up. We end up selling better on partner sites and also on our own site during sales," says Vivek Gaur, Co-founder and CEO of online fashion brand YepMe. “We have set aside additional stock for these platforms. We expect four to five times of average sales on partner sites during this period, and about 40 percent additional sales on our site," says Vivek.
YepMe sells its brand of men's and women's wear on its own site and through marketplaces like Flipkart, Amazon, Mynta, Jabong, and Snapdeal which provide about 20 percent of YepMe's sales. This month it is expected to be higher. YepMe handles order fulfilment on its own; Vivek says he has alerted his logistics partners to expect larger volumes.
Last year during Flipkart’s Big Billion Sale, 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.
Sellers are not bearing discount burden
YepMe is not giving any additional discounts. It is the three marketplaces which are offering discount vouchers and coupons that are applicable to products of brands who are associating with the sale.
Brands have stringent agreements with marketplaces on this regard. “I know a lot of brands that told Flipkart that they cannot sell their products at a cheap price. Now there is a minimum operating price (MOP) – you can’t sell something below that,” says Gurpreet Singh, Co-founder and CEO, Browntape, e-commerce software for online sellers.
All the work for the sales was stopped 10 days before – you can’t change products or prices now.
“They definitely have sobered up this time. They are not pushing us too much on discounts,” says Sayak Sahu, Co-founder of SmileDrive, an online seller of gadgets. While they are hoping for about 200 orders per day during the sale, they have not stocked up particularly for the sale.
Newer challenges, better preparations
Since all the major marketplaces have added a lot of merchants as well as increased the number of categories, it’s not just the technical problems they have to take care of, but also the logistics part of it. “The entire supply chain will be tested strongly, as they have increased the number of places they will deliver too,” says Arvind Singhal, Chairman of Technopak advisory firm.
Gurpreet agrees. “We have asked the merchants to develop big inventories for this season for a smooth sale,” he says. Courier becomes a huge problem during sales—they may not pick up half the orders on time as they are also very loaded. “We have told the sellers to find the courier services closest to them. If the marketplaces have a large volume of orders, they should also have some temporary arrangement where they can deliver the package themselves.”
Since most marketplaces have warehouses, the sellers could keep some inventory there. In the past month, Flipkart through its programme called Flipkart Advantage and Snapdeal through Snapdeal Plus have thus beefed up their capacity, Gurpreet told YourStory.
“We have direct importers and have an inventory ourselves. The products which already sell well will do so in the sale period too. We are sure we will see a hike in sales,” says Sayak of SmileDrive.
(With inputs from Radhika P Nair)