Piling inventory forces seller’s hand, this sale season’s discounts set to touch levels not seen in years
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Synopsis

Sellers have not been able to clear stocks. High inventory levels and the willingness of sellers to dump stocks to free up working capital could drive down prices on ecommerce platforms to levels before the heydays of the ecommerce market’s growth in India in 2015 and 2016.

JioMart’s entry this year is another factor that could force prices to hit rock bottom.

BENGALURU: Ecommerce platforms could offer a flurry of discounts this festive season, as sellers and manufacturers look to liquidate high levels of inventory, according to industry executives.

The rebates could be mainly in categories such as fashion, small electronics, appliances, personal care products and toys, they said.

Slow offline sales and shifting consumer preferences have deterred many traders and manufacturers from clearing stocks even six months after India went into a nationwide lockdown to curb the spread of the Covid-19 outbreak.

“Everyone has underestimated how much inventory is still with sellers and manufacturers,” said a senior executive at a leading ecommerce marketplace. “Now, they (sellers) are looking at ecommerce players to help them liquidate the stocks before the end of the year.”

High inventory levels and the willingness of sellers to dump stocks to free up working capital could drive down prices on ecommerce platforms to levels before the heydays of the ecommerce market’s growth in India in 2015 and 2016, the executive added.

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The entry of Reliance Industries’ JioMart, which is understood to be planning mega discounts to spur demand among consumers, could also see prices on ecommerce platforms hit rock bottom during the festive period. “There has always been price matching between platforms in segments like smartphones, appliances, white goods and, to some extent, in smaller ticket categories such as electronics during the festive period,” said a second executive who spoke on condition of anonymity.

“We’re going to have to wait and watch to see how aggressive Jio Mart is going to be.” Online marketplace Snapdeal said a large proportion of its sellers have significant offline operations, but given subdued demand offline over the past six months, it is expecting sellers to allocate greater volumes of stocks to online platforms. “Many of our sellers are exporters of fashion apparel, handloom products, bed linen, furnishings, etc. Due to both delay and cancellations of overseas orders, a substantial part of this supply is now being sold online and will be promoted by sellers in the forthcoming festive sales,” a Snapdeal spokesperson said. Walmart-owned Flipkart said it has seen a 50% increase in sellers interested in moving online compared to pre-Covid-19 levels.

US-based online retailer Amazon said helping and accelerating business for its sellers was more important than ever before.

Executives at both firms told ET that sellers were holding extremely high levels of stocks in several categories, which could lead to some amount of dumping during the festive sales. It is a moot point, however, if consumers will take the bait and shop for items that they may not necessarily need right now, they added. “There is going to be pressure to discount for certain product categories,” said Ankur Pahwa, Partner at EY.

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9 Comments on this Story

RajeshK9 days ago

Did anyone check this:

https://amzn.to/3l6BmeT

Kailash lallchandani10 days ago

Alnoor !! Your view point seems to be highly immature from the vendor as well as consumer point of view…. These discount offers are coming every year but you should note that these are neither for the benefit of consumers or end users. Discount is just an eye wash to attract the consumers.

Satya Prasad10 days ago

Let us see

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