Home Retail No more discounts: India’s e-tailers run into losses

No more discounts: India’s e-tailers run into losses


The e-commerce revolution hit India hard and fast. The easy availability of the Internet and the world of e-tailers changed the way the great Indian middle class shopped.

No more discounts: India's e-tailers run into losses
All big retailers - including Snapdeal, Flipkart and Amazon India - have reported losses in financial year 2014-15

The online deals were great, the stuff e-commerce firms were selling was as good as that found in any brick-and-mortar store and e-tailers built a loyal customer base.

The digital dream, however, seems to be fading into reality. Online giants – including , and India – have woken up to a new reality. Losses.

All big retailers have reported losses in financial year 2014-15. Mounting losses and heat from investors breathing down their necks have led e-commerce majors to water down discounts.

Hot selling items like women’s apparel are the worst hits and major discounts can only be availed of during stock clearance sales.

CEO Jabong, was quoted by The Financial Express as saying, “Given the current environment, in the last couple of quarters, online retailers have been focusing on bringing down discount levels as there is pressure from investors to turn businesses profitable. In January-March, we have reduced our discount levels by 10 per cent to 15 per cent and in the October-December quarter, we had reduced discount levels by around 6 per cent. Women and footwear categories discount levels have declined sharply.”

Jabong is one of India’s leading online fashion retailers.

According to PWC data, private equity deals have dropped 119 per cent in the second half of financial year 2015-16, compared to the first half. In between April 2015 and September 2015, there were 118 private equity deals in the e-commerce space amounting to $273.41 billion. From October 2015 to March 2016, there were 108 private equity deals in the space, amounting to $124.83 billion.