This post has been self-published on Youth Ki Awaaz by ishan arora. Just like them, anyone can publish on Youth Ki Awaaz.

Beyond Discounts, How Companies Can Survive The E-Commerce Boom (And Fierce Rivalry)

More from ishan arora

By Ishan Arora:

The Indian e-commerce industry is likely to be worth USD 38 billion by the end of 2016. By 2020, this industry is likely to touch a whopping figure of USD 119 billion. In terms of users, it is already the second-largest internet market globally with three internet users are added every second. Internet penetration is likely to increase from 35% in 2016 to 59% by 2020, which means around 320 million online shoppers. M-commerce, i.e., shopping using mobile devices is likely to contribute up to 70% of the total revenue generated by various e-commerce websites. And given the aggressive online discounts, rising fuel prices and a wider and abundant choice, significant growth is expected.

Why Is There A War? What Is The Fuss All About?

It is evident that the Indian e-commerce industry offers tremendous growth. With such a promising growth and so much at stake Flipkart, Snapdeal and Amazon are fighting for their survival in the e-commerce industry. All three big shots want to maximise their market share and are implementing different strategies to attract more customers. These include offering huge discounts, tightening the refund period, faster delivery of products etc.

In 2015, Flipkart was the market leader with 43% market share. Snapdeal had 19% market share whereas Amazon had only 14%. By March 2016, these figures completely changed. Flipkart’s share fell to 37%, for Snapdeal it was 14% and Amazon was able to gain 23% of market share.

So, what led to a change in these figures? It was the customer experience these companies were providing to their users and the discounts they were offering. If you see the image below you will notice that the revenue generated is directly proportional to the loss incurred by the company. Which means that companies are generating revenues but at the cost of their profits, i.e., they are trying to attract customers by offering more discounts which is not a good way of doing business. And by doing so companies will attract only the price-sensitive customers who are likely to leave them in case these users get a better deal on other sites. So, is it the right thing to do and does it guarantee a long-term growth?

chart comparing revenues and losses of Amazon, Snapdeal and Flipkart
Data source: Techcircle.

How Does It Benefit A Consumer?

With increasing rivalry among these players, the bargaining power of customers is increasing as now they have a lot of options to choose from. Also, companies are offering huge discounts and, as a result, customers are getting the same quality products online but at a much cheaper price.

Recommendations

Strategies For Sellers

1. Account Reputation:

Every seller has an account on an e-commerce website and the reputation of the seller depends on factors like shipping speed, returns and cancellation, positive and negative feedback etc. It is important for a seller to maintain a good account reputation because it not only increases its sales but also enhances the brand of the seller and minimises the product returns (due to quality issues).

E-commerce websites should keep a track of the all the sellers. They should incentivise the good sellers (so as to motivate them to do well) and bar all the bad sellers from doing business on their platform.

2. Study The Competition:

It is very important for sellers to study and analyse the competitors selling on other marketplaces and accordingly they should formulate their own strategies. A seller has to decide whether he wants to sell more at a lesser price or sell less at a higher price. Say, for example, seller A is selling a camera for Rs. 3,000 on Flipkart and competitor B is selling the same product for Rs. 3,200 on Amazon. Now, seller B sells 10 units of cameras in a month and, due to lesser price seller, A is able to sell 15 units. The cost of the product is same for both, i.e., Rs. 2,500. Therefore, seller A makes a profit of 500*15= Rs. 7,500 whereas B earns 700*10=Rs 7,000. Hence, it is up to sellers whether they want to sell more at a lesser price or sell less but at a higher price.

3. Follow A Loss-Leader Pricing Strategy:

A loss-leader is a pricing strategy where a product is sold at a price below its market cost to stimulate other sales of more profitable goods or services. It allows the sellers to build a database of customers and increases the opportunities for positive feedback.

Promotion Strategies

1. Right Merchandise Mix:

E-commerce websites should regularly analyse their business using Google Analytics and forecast the future trend. Categorising the products into categories of ‘High Sellers’, ‘Regular Sellers’ and ‘Slow Sellers’ would help them design the right merchandising mix.

2. Split Catalogue Into Four Categories:

a) High Traffic: High Conversion (Star products. Always keep them in stock. Less advertising. Increase inventory.)
b) High Traffic: Low Conversion (Adjust price. Improve product description.)
c) Low Traffic: High Conversion (Advertise and increase visibility.)
b) Low Traffic: Low Conversion (Discontinue.)

3. E-Commerce Discounts:

Discounts play a vital role when a customer is in a mood to make a purchase. Today, customers want to shop from a website offering more discounts rather than a website offering no/less discounts (even if it offers a lesser selling price). So, companies should follow a high-low model of discounting, i.e., initially (when the product is introduced or is in the growth stage) they should keep the prices high and offer heavy discounts (to get the attention of its customers). As the product enters the maturity stage, they should eventually decrease the price.

Conclusion

The e-commerce industry is a very lucrative industry and is expected to grow manifold in the near future. It is evident from the fact that despite heavy competition a lot of investors are willing to invest money in this booming sector. But to succeed, companies will have to think beyond discounts because discounts will give them only price-sensitive customers and not brand loyal customers. So, if a company is able to provide a better customer experience, good quality products at affordable prices, value for money etc. it will definitely capture more market share.

Banner image credit: Hemant Mishra/Mint via Getty Images.

You must be to comment.

More from ishan arora

Similar Posts

By Gulraj Bedi

By Shantanu Mendhe

By Bedanta Upadhyay

Wondering what to write about?

Here are some topics to get you started

Share your details to download the report.









We promise not to spam or send irrelevant information.

Share your details to download the report.









We promise not to spam or send irrelevant information.

An ambassador and trained facilitator under Eco Femme (a social enterprise working towards menstrual health in south India), Sanjina is also an active member of the MHM Collective- India and Menstrual Health Alliance- India. She has conducted Menstrual Health sessions in multiple government schools adopted by Rotary District 3240 as part of their WinS project in rural Bengal. She has also delivered training of trainers on SRHR, gender, sexuality and Menstruation for Tomorrow’s Foundation, Vikramshila Education Resource Society, Nirdhan trust and Micro Finance, Tollygunj Women In Need, Paint It Red in Kolkata.

Now as an MH Fellow with YKA, she’s expanding her impressive scope of work further by launching a campaign to facilitate the process of ensuring better menstrual health and SRH services for women residing in correctional homes in West Bengal. The campaign will entail an independent study to take stalk of the present conditions of MHM in correctional homes across the state and use its findings to build public support and political will to take the necessary action.

Saurabh has been associated with YKA as a user and has consistently been writing on the issue MHM and its intersectionality with other issues in the society. Now as an MHM Fellow with YKA, he’s launched the Right to Period campaign, which aims to ensure proper execution of MHM guidelines in Delhi’s schools.

The long-term aim of the campaign is to develop an open culture where menstruation is not treated as a taboo. The campaign also seeks to hold the schools accountable for their responsibilities as an important component in the implementation of MHM policies by making adequate sanitation infrastructure and knowledge of MHM available in school premises.

Read more about his campaign.

Harshita is a psychologist and works to support people with mental health issues, particularly adolescents who are survivors of violence. Associated with the Azadi Foundation in UP, Harshita became an MHM Fellow with YKA, with the aim of promoting better menstrual health.

Her campaign #MeriMarzi aims to promote menstrual health and wellness, hygiene and facilities for female sex workers in UP. She says, “Knowledge about natural body processes is a very basic human right. And for individuals whose occupation is providing sexual services, it becomes even more important.”

Meri Marzi aims to ensure sensitised, non-discriminatory health workers for the needs of female sex workers in the Suraksha Clinics under the UPSACS (Uttar Pradesh State AIDS Control Society) program by creating more dialogues and garnering public support for the cause of sex workers’ menstrual rights. The campaign will also ensure interventions with sex workers to clear misconceptions around overall hygiene management to ensure that results flow both ways.

Read more about her campaign.

MH Fellow Sabna comes with significant experience working with a range of development issues. A co-founder of Project Sakhi Saheli, which aims to combat period poverty and break menstrual taboos, Sabna has, in the past, worked on the issue of menstruation in urban slums of Delhi with women and adolescent girls. She and her team also released MenstraBook, with menstrastories and organised Menstra Tlk in the Delhi School of Social Work to create more conversations on menstruation.

With YKA MHM Fellow Vineet, Sabna launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society. As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Read more about her campaign. 

A student from Delhi School of Social work, Vineet is a part of Project Sakhi Saheli, an initiative by the students of Delhi school of Social Work to create awareness on Menstrual Health and combat Period Poverty. Along with MHM Action Fellow Sabna, Vineet launched Menstratalk, a campaign that aims to put an end to period poverty and smash menstrual taboos in society.

As a start, the campaign aims to begin conversations on menstrual health with five hundred adolescents and youth in Delhi through offline platforms, and through this community mobilise support to create Period Friendly Institutions out of educational institutes in the city.

Find out more about the campaign here.

A native of Bhagalpur district – Bihar, Shalini Jha believes in equal rights for all genders and wants to work for a gender-equal and just society. In the past she’s had a year-long association as a community leader with Haiyya: Organise for Action’s Health Over Stigma campaign. She’s pursuing a Master’s in Literature with Ambedkar University, Delhi and as an MHM Fellow with YKA, recently launched ‘Project अल्हड़ (Alharh)’.

She says, “Bihar is ranked the lowest in India’s SDG Index 2019 for India. Hygienic and comfortable menstruation is a basic human right and sustainable development cannot be ensured if menstruators are deprived of their basic rights.” Project अल्हड़ (Alharh) aims to create a robust sensitised community in Bhagalpur to collectively spread awareness, break the taboo, debunk myths and initiate fearless conversations around menstruation. The campaign aims to reach at least 6000 adolescent girls from government and private schools in Baghalpur district in 2020.

Read more about the campaign here.

A psychologist and co-founder of a mental health NGO called Customize Cognition, Ritika forayed into the space of menstrual health and hygiene, sexual and reproductive healthcare and rights and gender equality as an MHM Fellow with YKA. She says, “The experience of working on MHM/SRHR and gender equality has been an enriching and eye-opening experience. I have learned what’s beneath the surface of the issue, be it awareness, lack of resources or disregard for trans men, who also menstruate.”

The Transmen-ses campaign aims to tackle the issue of silence and disregard for trans men’s menstruation needs, by mobilising gender sensitive health professionals and gender neutral restrooms in Lucknow.

Read more about the campaign here.

A Computer Science engineer by education, Nitisha started her career in the corporate sector, before realising she wanted to work in the development and social justice space. Since then, she has worked with Teach For India and Care India and is from the founding batch of Indian School of Development Management (ISDM), a one of its kind organisation creating leaders for the development sector through its experiential learning post graduate program.

As a Youth Ki Awaaz Menstrual Health Fellow, Nitisha has started Let’s Talk Period, a campaign to mobilise young people to switch to sustainable period products. She says, “80 lakh women in Delhi use non-biodegradable sanitary products, generate 3000 tonnes of menstrual waste, that takes 500-800 years to decompose; which in turn contributes to the health issues of all menstruators, increased burden of waste management on the city and harmful living environment for all citizens.

Let’s Talk Period aims to change this by

Find out more about her campaign here.

Share your details to download the report.









We promise not to spam or send irrelevant information.

A former Assistant Secretary with the Ministry of Women and Child Development in West Bengal for three months, Lakshmi Bhavya has been championing the cause of menstrual hygiene in her district. By associating herself with the Lalana Campaign, a holistic menstrual hygiene awareness campaign which is conducted by the Anahat NGO, Lakshmi has been slowly breaking taboos when it comes to periods and menstrual hygiene.

A Gender Rights Activist working with the tribal and marginalized communities in india, Srilekha is a PhD scholar working on understanding body and sexuality among tribal girls, to fill the gaps in research around indigenous women and their stories. Srilekha has worked extensively at the grassroots level with community based organisations, through several advocacy initiatives around Gender, Mental Health, Menstrual Hygiene and Sexual and Reproductive Health Rights (SRHR) for the indigenous in Jharkhand, over the last 6 years.

Srilekha has also contributed to sustainable livelihood projects and legal aid programs for survivors of sex trafficking. She has been conducting research based programs on maternal health, mental health, gender based violence, sex and sexuality. Her interest lies in conducting workshops for young people on life skills, feminism, gender and sexuality, trauma, resilience and interpersonal relationships.

A Guwahati-based college student pursuing her Masters in Tata Institute of Social Sciences, Bidisha started the #BleedwithDignity campaign on the technology platform Change.org, demanding that the Government of Assam install
biodegradable sanitary pad vending machines in all government schools across the state. Her petition on Change.org has already gathered support from over 90000 people and continues to grow.

Bidisha was selected in Change.org’s flagship program ‘She Creates Change’ having run successful online advocacy
campaigns, which were widely recognised. Through the #BleedwithDignity campaign; she organised and celebrated World Menstrual Hygiene Day, 2019 in Guwahati, Assam by hosting a wall mural by collaborating with local organisations. The initiative was widely covered by national and local media, and the mural was later inaugurated by the event’s chief guest Commissioner of Guwahati Municipal Corporation (GMC) Debeswar Malakar, IAS.

Sign up for the Youth Ki Awaaz Prime Ministerial Brief below