BENGALURU: Ecommerce companies have started showcasing smallscale promotional events to spur consumer demand, two weeks after restrictions on shipping products were relaxed across the country, in what analysts say is a sign of normalcy in a sector that typically drives sales through discounts.
Flipkart, too, announced its Flipstart Sale spanning three days starting June 1, offering bank-led offers along with straight up discounts across a range of products.
The ecommerce platforms may be running promotions just like they did before the Covid-19 pandemic, but industry executives told ET that they were gauging consumer demand as well as supply side issues before hosting the next mega sale event.
“This is a small activity to try and improve consumer sentiment at this point of time with a few sellers getting together and running promotions,” said a senior executive of a large marketplace that is currently running a sale. “
“There have hardly been any discussions around running a large sale event because we are still unsure of demand.”
Large ecommerce marketplaces Flipkart and Amazon lost the opportunity to host a big sale event around the Indian Premier League this year and have yet to announce their back-to-school sales that typically take place in early June owing to lack of visibility around when schools and colleges would reopen.
They are also closely monitoring supply of products such as smartphones, laptops, TVs, electronics and some appliances, which require components to be imported from countries where supply chains have not yet been fully restored. “Anything with a screen in it runs the risk of supply issues, so sales to boost buying is out of the question,” another executive added.
Others said discounts on platforms could be muted for at least a quarter as sellers are witnessing only need-based buying, from opportunistic buying rampant on their platforms earlier, chiefly led by a multitude of sale events through the year. “Brands are caught between a rock and a hard place,” said a venture capital investor with a large brands portfolio. Even after the 50-day shutdown and the fear of stepping out to physical outlets, ecommerce has only recovered 70-80% of its pre-Covid-19 sales, he added.
“With that kind of consumer traffic online, businesses will have to think harder about when to trigger discounting,” he said.
Amazon, which has not yet announced a sale or promotional event, said it was seeing high demand, although that has been driven largely by need-based buying, which could taper off in the coming weeks.