Popular e-commerce websites Flipkart, Amazon and Paytm Mall have been offering huge discounts during the festive season in India. As per reports, these sites now have new buyers – offline stores are buying products from these websites to resell them to consumers later at market prices.
According to to a report published in Economic Times, the offline stores have created 5 to 10 or even more user accounts on these e-commerce sites to order products to avoid restrictions on the number of discounted units and cashback offers that a user can avail.
The report further suggests that these offline retailers have accounted for more than 20% of the total sales of smartphones and even the FMCG products from online marketplaces this festive season. As per the industry experts, the prices that the e-commerce sites are offering are mostly below from those at which offline distributors are offering these products.
The most popular smartphone brands which are bought by offline traders include the iPhones, Oppo, Vivo, Xiaomi, Motorola, and Samsung. These devices are available on either at massive discounts or on cash back offers. In FMCG category, retailers are mostly buying bundled packs on which the discounts are the highest. These include from categories like detergents, soaps, sanitary pads, diapers, chocolates, sauces, and snacks etc.
“The online discounting this time has been far too much, especially in some categories and products. In fact, in a few smartphone models, it (price on e-commerce sites) is even below the distributor price. Hence, several smaller retailers are buying it online,” said Kumar Rajagopalan, Chief Executive- Retailers Association of India.
If we talk about, e-com sites, they are spending a fortune on these festive sales. Paytm Mall had said it would spend at least Rs 1,000 crore on marketing, cash-backs, and promotional offers during the festive season. Apart from this, smartphone companies like Lenovo and Xiaomi offer their phones exclusively on e-com sites. Amazon and Flipkart also offered huge discounts as well.
“However, Amazon has been selling several smartphone models on deep discount and Paytm Mall is running massive discount and cashback offers up to 20% all through the festive season, whereby there has been price disruption prompting several retailers to purchase from these sites,” said a for smartphones distribution company owner.