Amazon’s BIG Day “Sale” to last a month, annoys offline Retailers

Over a fifth of all offline Retailers in the semi-organised space selling apparel, footwear, electronics among other things have already shut shop or on the verge of shutting down and may do so by Mar. ‘21 due to the pandemic led burnout with shopper numbers dwindling by the day. More so, due to the convenience of online shopping which has taken a huge leap in the past 18 months ever since the first lockdown began.

Enter Amazon Big Day and Flipkart’s Big Billion Days.

The two iconic “shopping festival days” are loosely based on Big Bazaar’s “Sabse Sasta Din” which Mr. Kishore Biyani pioneered at the company’s then flagship outlet at Phoenix Mills, Lower Parel, Mumbai. Ever since, the festival became bigger and popular where in the country’s former largest offline Retail chain offered almost all items at cost price while also including enchanting offers. It was KB’s watershed moment since he wanted to create India’s very own Black Friday or Thanksgiving Sales which is a celebrated shopping event in the West. Over time, Big Bazaar’s popularity slowed down with the company reducing prices almost on a regular basis, so the charm of waiting and buying reduced for discerning shoppers. After all, we as consumers prefer a “deal” most of the times, don’t we?

Amazon and Flipkart have done well all these years and it was estimated that the festive season e-commerce sales was approx. USD 7 billion in 2020, it’s highest ever. This year, RED Seer Consulting estimates e-commerce platforms to garner USD 9 billion in Oct. ‘21. “We are humbled by their (sellers) spirit and delighted with the opportunity to partner and enable their growth, especially in view of recent challenges owing to the (Covid-19) pandemic,” said Manish Tiwary, VP, Amazon India.

It must be noted that no one really knows whether the Rs. 50,000 Cr of goods sold online last year were bought by end-users or by shopkeepers and middlemen who resell the goods once again at offline shops. However, only the Gross numbers are reported and it is estimated that over 50% of these sales actually are B2B – bought by smaller businesses or by small & mid-size offices or corporates for their business needs. Nevertheless, it is a sale that is offset offline which construes to a deep impact on the retailers who do business in the real world. With allegations of Amazon’s apparent back door entry, it’s infamous JV with Catamaran Ventures owned by noted IT czar Mr. Narayana Murthy’s family office and a huge retailation by CAIT, the Industry trade body, the going could get tougher for online companies if the top Courts of India take cognisance of the matter, suo moto or through a writ petition filed by one of the parties who have been deeply impacted. During the sale period, almost all items sold on the marketplaces are deeply discounted, which hurt the cause of the offline retailers. Would be an interesting month to watch in this space all through October.