wordpress blog stats
Connect with us

Hi, what are you looking for?

, ,

Let’s Not Discount Caution On Ecommerce – Ankur P Agarwal, Pricebaba

annkur agarwalMy twitter friends have taken a politician’s comments about ecommerce discounting practices quite negatively. He is quoted as saying“Investigation is the only alternative left with us. Selling an item which costs Rs 20 for Rs 18 is no business logic.”.

Do we see that as a statement against the Internet, modernization and progress? Have we gotten too comfortable with buying products at discounted online sales? When I started selling (and buying) products online in 2001-2002, the market was equally exciting, minus the big numbers. I bought my college bag for Rs 199 on Cash on Delivery and paid for a can of Deodorant and 500ml soft drink by Cheque on delivery. The e-commerce market didn’t fly for a variety of reasons.

While making a big push for e-commerce in India, Flipkart and others have had to invest in building trust, with 30 days replacements, Cash On Delivery infrastructure, and free & quick deliveries. That’s a great investment to make, which benefits the entire ecosystem. However, I take great offense to any support for discounting products to get customers. Legal ramifications aside, it is scary that local retail is losing the battle, just because they cannot match loss making capacity of large e-commerce players.

ecommerce-boom-caution

A quick back of the envelop calculation tells me that Flipkart, Amazon, eBay, Snapdeal & others can perhaps discount a $10 Billion smartphone market for 12 months by ~10%, by just investing 1/5th of their funding. Do we expect local retailers to match that? Are we okay with losing local retailers just because we want these discounts to continue? Do you believe that online retailers who sell at a discount to kill competition would play very well for the consumers when there isn’t as much competition?

I am no politician and I have earned my bread and butter from ecommerce for over a decade now. As much as I am happy to see ecommerce booming in India, I am not ready to accept a market where a monopoly emerges like this. So before we blindly cheer and support ecommerce, do stop and think about how and why you got that product cheaper than what the distributor sold it for.

*

Writers note: I do understand that all products are not sold at a discount. Not related, but you may want to read Why Discounts Are Suffocating

Annkur P Agarwal is the co-founder of PriceBaba. He previously founded OnlyGizmos and has also been an online retailer since 2002. You can talk to him on twitter: @annkur

Written By

Free Reads

News

Telecom companies are against a regulatory sandbox, as they think information revealed by businesses during the sandboxing process might be confidential should be out...

News

According to a statement, the executive body of the European Union had also sought internal documents on the risk assessments and mitigation measures for...

News

The newly launched partially open-sourced LLM Grok-1 can be commercially used but not trademarked.

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

Views

News

NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...

News

Notably, Indus Appstore will allow app developers to use third-party billing systems for in-app billing without having to pay any commission to Indus, a...

News

The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...

News

Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...

News

Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...

You May Also Like

News

Google has released a Google Travel Trends Report which states that branded budget hotel search queries grew 179% year over year (YOY) in India, in...

Advert

135 job openings in over 60 companies are listed at our free Digital and Mobile Job Board: If you’re looking for a job, or...

News

By Aroon Deep and Aditya Chunduru You’re reading it here first: Twitter has complied with government requests to censor 52 tweets that mostly criticised...

News

Rajesh Kumar* doesn’t have many enemies in life. But, Uber, for which he drives a cab everyday, is starting to look like one, he...

MediaNama is the premier source of information and analysis on Technology Policy in India. More about MediaNama, and contact information, here.

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ

Subscribe to our daily newsletter
Name:*
Your email address:*
*
Please enter all required fields Click to hide
Correct invalid entries Click to hide

© 2008-2021 Mixed Bag Media Pvt. Ltd. Developed By PixelVJ