Monday, October 17, 2011

ONLINE SHOPPING:BETTER DEALS

It’s not just malls, high streets and kitschy neighbourhood markets laying down the red carpet for consumers in the festive shopping rush. The walls of the physical marketplace are being demolished and the festive shopping action is as much exciting on the world wide web.
With online shopping witnessing a strong take-off stage with most online shopping portals claiming high quarter-on-quarter growth rates, they are leaving no stone unturned in offering a plethora of offers, discounts and even lucky draws, just like your friendly neighbourhood shopping mall. And why not? With industry sources pegging the festive season sales (October-December quarter) at as much as 35-40% of their total sales annually, the overdrive on their part is all but expected.
“It’s a phenomenon that has set in only in the last two to three years and seasonality is now emerging as a major determining factor in online shopping as well. This has been the case in developed online shopping markets like the US for a long while now, and the closest that the Indian landscape can get to it is around the Dussehra-Diwali festivities.
We expect to have 30-35% of our annual sales in the October-December quarter, and a 15% month-on-month growth in October specifically over September, riding on the festive shopping rush and the phenomenal growth being witnessed by the sector anyway,” says Abhimanyu Lal, director (marketing) eBay India. eBay’s Dussehra promotion is on till October 4, after which the Diwali promotion is slated to take over. Lal adds that they will be expanding their special weekly deals property, and will be offering a broad range of free gifts and, of course, discounts, ranging from 15-20% to even 90% for a few products.
Atrash Aman, director-marketing and strategy, Homeshop18, speaks in similar vein. “The overall investment for our online festive promotions is R1 crore. I wouldn’t be surprised if we see a growth of about 40-50% over our sales in September.
For the online shopping landscape in the country, this quarter contributes to as much as around 40% of the total annual sales. As for us, around 35% of our annual sales come from this quarter. We’ve been coming out with aggressive festive offers around Diwali not only on television but online as well in a big way, and it is now in its fourth year,” says Aman. Homeshop18.com’s festive promotion promises 100% assured gifts with every purchase, along with weekly and bumper lucky draws with prizes like sedans, LCD televisions and iPods, to name a few. Along with that, discounts are in the range of 25-75%.
But it’s not just the biggies of online shopping that are going all guns blazing into October and the new quarter.
Smaller but rapidly growing shopping and deals portals, which have been mushrooming over the Indian online landscape are pretty gung-ho about the festive season, too. Quintessential Diwali gifts, ranging from the good old home appliances to snazzy tablets and cell phones, and even deals and discounts on dry fruits and chocolates, the virtual marketplace is abuzz. And, of course, these new age fashion and deals dotcoms are doing whatever it takes to attract the discerning Indian consumer with attractive deals on almost any and every product or service. Navratri thalis, gold coins, jewellery, candles, Diwali gifts, home appliances and beauty packages for garbha nights, you name it and websites like Fashion and You, SnapDeal, Mydala, Deals and You and 99 Labels are selling it. In fact, it’s keeping in mind the DNA of the Indian consumer and the array of festivals that the websites are chalking out their marketing strategies. “Right now it’s the lead time for Diwali offers. We are doing jewellery and saree sales in the run up to the Karva Chauth. We intend to have a special page on our website dedicated to Diwali sales,” explains Anisha Singh, founder and CEO of Mydala. The website has more than 4 million subscribers. She adds that since people spend during Diwali season they are taking all the initiatives to ensure that people spend online and expect transactions to go up by 50% during festive season.
Daily deals website SnapDeal’s chief marketing officer Sandeep Komaravelly adds, “We are adding many travel products on our website as many people travel during holidays.” SnapDeal, which has about 10 million subscribers and gets 2 million unique visitors, is targeting a turnover of R150 crore for the fiscal ending 2012. As per industry estimates, for any shopping site, the sales are expected to go up by around 20% month-on-month during October.
The business head of e-commerce portal Naaptol, Sachin Singhal, says that they are expecting an increase of 30% in traffic and 15-20% hike in the number of transactions for the month of October.
Similarly Fashion & You and Deals & You are looking at doubling their number of transactions and revenue during the festive month.
99 Labels has projected an increase of 30-35% in traffic and transactions in the month of October over September. The website is already offering express delivery to consumers so that the goods can reach on time for consumption during the festival season.
And what is attracting consumers to buy online rather than going the traditional touch-feel-and-buy way?
It’s the big discounts, lucky draws, attractive prizes and, of course, the convenience factor.
Log onto any website and you will see banners screaming special offers for Diwali. The price conscious consumer will certainly be scratching his palms to buy cheaper products online with just a click.
Aman adds that the phenomenal growth being witnessed by the online shopping segment is evident from the daily number of shipments by Homeshop18’s portal. “We had hit the 10,000 shipments a day mark a few months ago, and we expect it to reach half-a-million shipments daily in a few more months. We have been growing almost 200% quarter-on-quarter for about 12-15 months now,” he says.
Industry estimates peg the number of online shoppers at around 10-11 million, just about one-tenth of the total number of Internet users in the country. Obviously, the opportunity is tremendous.
And what about back-breaking inflation and fears of a repeat of 2008 global slowdown having an effect on the spending power of the consumers?
“In a high inflationary environment, we are hoping that people will turn to online shopping in a big way this year to save big bucks,” says Singh of Mydala.
For festive season it’s getting bigger and better for netizens. For instance, luxury goods portal 99 Labels is offering free shipping in October and during the week prior to Diwali, goods on the website will be sold at a discount of 80-90%.
Abhimanyu Lal of eBay India says that though the threat of a major global slowdown yet again is very real, online shopping business has been counter-cyclical to such developments in the past. “Big ticket purchases might go down for obvious reasons as the pockets of consumers will be under heavy stress. But apart from that, most of the product categories in which online shopping sites mostly deal will see a reverse trend as consumers will move to online portals as they more often than not get much better deals and discounts online. Online shopping sites suit the consumer perfectly well in a recessionary environment,” he says.
For portals, innovation is the key when it comes to marketing during festive season. After all offline channels are extremely tough competition.
“We have weekly offers. For instance, we are dedicating one week to home decor products, another to women.
Similarly, there is a week for jackpots, as it’s the season for gamble. Besides there are also exciting days of sale, for example, in the run up to Diwali there will be a 24-hour loot sale,” explains Trivikram Thakore, CMO, Fashion & You.
Fashion & You and Deals & You (owned by the same company) together have around 5.2 million registered members of which half are active buyers.
With practically minimal real estate and logistical costs, the new age shopping portals can offer huge discounts to consumers.
Of course, there are other benefits too of being online.“People are opening up to the idea of buying online. Interestingly, during the inauspicious shraadh months, while sales at retail stores dipped, online retail didn’t get impacted,” points out Ishita Swarup, CEO, 99 Labels. The website has around 6.5 lakh registered members.
On the overall online shopping landscape in the country, Nitin Khanapurkar, partner-management consulting at KPMG, predicts that over time, regular, small and mid-ticket purchases will be increasingly bought online, while big ticket buys and purchases, which are more about the customer experience will still stay in the marketplace.
“Online shopping has seen a phenomenal rise in the country and will continue to do so given the great potential and the huge segment of population which is still not net savvy. As for the festive season, or even otherwise, purchases for which the retail experience is important will still be more attractive at the marketplace.
However, online shopping has its obvious advantages and an e-fulfillment model can really take care of many logistical and inventory issues, which do become a problem for retailers during the festive season rush. It’s still a long way to go for online shopping in the country,” says Khanapurkar.
So while making that long shopping list for splashing money over the most awaited buys of the year, an online check of those products just might end up being quite useful. And if the purchase is more about experience, then the real marketplace is anyway waiting with a red carpet as well.
Vishakha Talreja, Sukalp Sharma
FE Sunday, 9o1011

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