Flipkart vs Amazon: Get set for a festival of discounts

The world’s two largest retailers Walmart and Amazon are for the first time bracing for a fierce battle to take a bigger share of the Indian wallet in the upcoming festive season, which accounts for almost 40% of the total consumer spend in the country. Walmart-owned Flipkart and Amazon India, the country’s two largest e-commerce marketplaces, have placed more than twice as much the volume of orders for televisions, appliances and smartphones as a year before, and have negotiated record low sourcing prices with vendors that they intend to pass-on to consumers as discount, executives of four brands.

They said Walmart has given a free hand to Flipkart’s management to run the sale this year with a mandate to ensure it is ahead of Amazon in both sales value and number of units sold. Flipkart is likely to invest a part of the $2-billion equity funding it received from Walmart for this year’s sales, three of them said. Amazon, too, is keen to emerge as the leader this year, which means that there could be a massive discounting war between the two, they said. “The marketplaces have clearly indicated that they will offer higher discounts this year and accordingly negotiated for lower prices in return of sourcing higher volume,” sales head of a leading consumer electronics firm told ET. “They have said that this year discounts will run for almost the entire period of the festive season till Diwali unlike previously when the big discounts were reserved for the special events. Just that the special events this year will have higher discount and cashback,” he said.

An email sent to Flipkart remained unanswered till Tuesday press time. An Amazon India spokesperson said the company expects the upcoming festive season to be its biggest so far in terms of sales, traffic, new customers and digital payment adoption. “Apart from best deals of the year on the biggest brands across categories, customers can look forward to more savings and convenience with programs such as no-cost EMI and exchange,” the person said. “Over 3.8 lakh sellers will collectively offer over 170 million products.” The first leg of online festive sale is expected from October 9-11. An executive who requested not to be identified said television sets will see their lowest online prices so far in popular screen sizes like 32 inches, 43 inches and 50 inches this Diwali season.

Officials at consumer electronics brands such as Vu, BPL, Thomson, Skyworth, Onida and Kodak confirmed a huge surge in online order volume for Diwali, but declined to share specifics citing confidentiality clauses. An executive of an online exclusive television maker said the brand’s order book for Diwali is triple of what it was last year. Ajit Nambiar, chairman at electronics brand BPL, said competition in the online space is going to be fierce this festive season. He said volumes of BPL, which sells exclusively on Amazon, have doubled compared to last year.

Country head of a leading Chinese smartphone maker said he expects sales to grow by 70-80% year-on-year this season on an already high base. Almost all top brands are expected to line up new launches just ahead of the festive season to build excitement, industry executives said.

Samsung and LG would launch new models during the festive season, they said. Devita Saraf, CEO at television maker Vu Technologies, said the brand will launch ten new models for Diwali. Avneet Singh Marwah, CEO of Super Plastronics said demand will be higher than last year when the effect of GST had dampened sentiments.

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