The Problem with Online Party Sales

Flipkart’s Big Billion Sale, Amazon’s Big Indian Festive Sale, Snapdeal’s e-Monday – these are just some of the many sales currently taking place on e-commerce sites.

Paytm, Myntra, Shopclues, FabFurnish and Pepperfry are other sites that are getting into the excitement, all of which have festive sales, while most of the others also have huge offers on their homepages, even s they don’t call them special. Sales.

Unless of course, when you actually look at the deals on offer, most of the products you’ll find aren’t exactly bargains or big discounts. As is always the case, MRPs are discussed and discounts are calculated based on these numbers, even though the products in question are almost never sold at MRP.

(Also see: When a deal is not a steal, how do you feel?)

Things can get especially out of control when a product’s never-before-seen special price is actually higher than the price it’s being sold for on a competing platform. At one point, it’s not just shoddy, it’s just plain embarrassing.

Flipkart is driving up product prices again? #BigBillionDays (Check the actual price on Amazon) pic.twitter.com/W5nmNG91cg

— Sohini (@Mittermaniac) October 14, 2015

We see 80% discounts on sites, and that’s misleading and just kinda dumb really. No one really believes those numbers anymore, and frankly, it’s also generating a lot of backlash on social media. At the same time, the idea of a festive sale is popular and leads to an increase in the number of visitors to the sites. So when things go wrong after that, it’s going to make it even worse.

(Also see: Flipkart Big Billion Days Sale Off to a Rocky Start)

None of the companies escapes this criticism either. Some have been more successful than others, but no site is afraid of inflated prices and false discounts.

And the reason why these sites have to take these ridiculous measures is also simple – we live in a time where all companies are locked in a race to the death in order to win over all consumers in the market. There’s little to no loyalty to sellers – whoever offers the best deal, even if it’s a 5% difference, gets the sale – and directing users to apps so they can’t not making a comparison isn’t working either.

When it comes to transactions, Indians are nothing if not diligent, and when your whole business model is based on transactions, you just train customers to spot the hype in your big sales. If a TV is still being sold at 50% off MRP, what possible offer can you offer shoppers when it comes time for your big sale?

Perversely, this means that the actual offers don’t seem to be much anymore. Consider this – a speaker that is usually sold for around Rs. 20,000 was available during one of the sales at Rs. 14,990. even more speakers. But the speaker’s MRP is Rs. 49,990 – this made the seller claim they were offering a 70% discount. Sure, 30 seconds with Google shows you exactly how much of a deal you’re actually getting… And suddenly that 25% discount (which, to reiterate, was a really good deal for a good product) starts to look like derisory.

How will online businesses circumvent this problem? There are no easy fixes – companies themselves have created the business-seeking mindset, but a discount-driven model is not a long-term answer. Businesses are going to have to experiment with new ways to make their offerings stand out and sell themselves beyond discounts. Then a “festive” sale will make sense – and companies might even be able to afford some real deals. For now though, all offers are easily 80% off – in other words, you can safely ignore eight out of ten offers.

Disclosure: The new Shop section of Gadgets 360 can be seen as a competitor to the e-commerce sites mentioned in the article.