Deals and discounts are back! Christmas and the New Year are going to bring some festive cheer to ecommerce companies and online buyers & sellers. Home-grown etailers Flipkart, Snapdeal and Paytm are hosting festive season sales. While sale events are a norm around this time of the year, but online marketplaces are also hoping that festive sales help to absorb the impact of demonetization.
Snapdeal ran a pre-new year ‘Unbox 2017 Sale’ from 17th to 19th December. At the other end, Flipkart is running ‘Big Shopping Days’ sale from 18th December to 21st December. Paytm’s ‘Maha Bazaar’ sale went live on 20th December and will continue till 22nd December.
Increasing sales high on the list of priorities
Ecommerce biggies’ aim is to improve the revenue figure of the last quarter (October to December) of 2016, which was heavily affected due to demonetization. Experts predict that there was a 15-20% fall in transactions in November and the average order value dropped by 30%. Hence, etailers may struggle to meet their year-end sales targets.
Smrithi Ravichandran, Director of Category Management at Flipkart, said,
“Till November 8, we were way ahead of our sales target set for the festive season from October-December. But post demonetization sales dropped by as much as 40% within 2-3 days. The situation became a tad better by the first week of this month. In the first week of December the drop in sale was 12-15%.”
These new round of shopping events are being hosted in a bid to increase sales and meet the 2016’s targets.
Ecommerce industry is home to biggest losses
Demonetization has definitely affected the overall order volumes of ecommerce firms. But heavy losses have become part of this industry, keeping aside all the new policies and economic changes. While the revenue growth rate of online marketplaces has increased in 2016, but so has the losses.
Alibaba-backed Paytm’s revenue increased by 200%, but its losses increased 4X. Flipkart’s loss increased by 110% in FY 2015-16 and it was devalued for the umpteenth time by its investors. Be it online furniture store Pepperfry, or food ordering firm FoodPanda, none of them have earned good returns for their investors.
If the trend continues, then existing and potential investors would run away faster than the speed of light. Ecommerce investments are already drying up gradually and many are pulling out as many start-ups have failed to deliver.
Would 2017 be any different? Would things turn around for the ecommerce biggies and startups? Let’s wait and watch!