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Business News/ Companies / Start-ups/  Big Billion Day sale: Flipkart can’t afford any snafus this time
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Big Billion Day sale: Flipkart can’t afford any snafus this time

Customer backlash last year partly why Flipkart seems to have hedged its bets by holding this year's sale for a longer period

Flipkart will offer discounts and offers on more than 70 product categories including electronics, apparel, toys and furniture from 13-17 October. Photo: Ramesh Pathania/MintPremium
Flipkart will offer discounts and offers on more than 70 product categories including electronics, apparel, toys and furniture from 13-17 October. Photo: Ramesh Pathania/Mint

Bengaluru: After last year’s snafu-ridden Big Billion Day sale, Flipkart cannot afford another customer backlash during the most important sale period of the year, which is partly why the company seems to have hedged its bets by holding this year’s Big Billion Day sale for a longer period instead of just one day.

India’s largest e-commerce firm on Monday announced that this year’s version of the Big Billion Day sale will be open for five days and will remain limited to its smartphone app. Flipkart will offer discounts and offers on more than 70 product categories including electronics, apparel, toys and furniture from 13-17 October.

Last year, Flipkart spent tens of crores of rupees on marketing its one-day Big Billion Day sale in October, touting deep discounts on all kinds of products. The company took just 10 hours to hit its target of $100 million in gross sales (exuding discounts) on the day of the sale, which is inspired from similar shopping events such as Cyber Monday and Black Friday in the US and the Singles’ Day sale held by Chinese e-commerce giant Alibaba Group.

However, Flipkart was unprepared for the rush of customer traffic and the company’s founders Sachin Bansal and Binny Bansal were forced to apologize to customers for pushing up prices of some products, cancelling orders, inadequate stock and other glitches.

A five-day sale rather than a compressed, heavily-advertised one-day event offers two potential benefits to Flipkart. As it has handicapped itself by holding an app-only sale event, the company can ill-afford to compete with Snapdeal and Amazon on generating the highest sales numbers in one day; its two rivals are likely to surpass Flipkart simply because they will pull in extra sales from their websites. But the five-day sale event will make it tougher for its arch rivals to beat Flipkart as customer fatigue is likely to set in at some point.

Another benefit relates to managing customer expectation and the sheer pressure that explosion in customer traffic would put on the company’s tech infrastructure. No matter what Flipkart does to improve its tech infrastructure, it is virtually impossible to seamlessly manage the sudden spike in traffic that a heavily-advertised one-day event brings. A customer rush dispersed over five days would tax its system far less than a one-day stampede.

This year’s Diwali is going to test Flipkart’s execution skills like never before.

The company faces rivals which have grown stronger. Its largest rival Snapdeal boosted its cash reserves by raising $500 million from Alibaba, Foxconn and others last month. Amazon India has continued to expand aggressively and seems to be catching up with its local rivals. While a new rival, Paytm, which has significantly expanded its commerce business over the past year, will also compete for shoppers’ attention this time.

Already, Flipkart’s unit Myntra has lost customers after it went app-only in May. Sales growth at Flipkart and other top online retailers slowed in the first quarter of the financial year, increasing pressure on the venture capital-backed companies to generate bumper sales during the key Diwali period, Mint reported on 23 July. E-commerce firms generate more than half their annual sales in the October-December quarter.

Flipkart, simply, has to deliver the goods this festival season.

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Published: 29 Sep 2015, 12:43 PM IST
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