E-commerce players like Flipkart and Snapdeal will see an inadvertent gain as the new FDI regulations have put a barrier on offering discounts. The companies are scrambling to preserve their cash and also cut down costs by temporarily slowing down Amazon’s advancement in India.
Although the three companies are still offering discounts which are given by third-party sellers on their sites. But they have revoked their prospective events and advertisements till the festive season to avoid any penalty from the Government.
Amazon has put a hold on its discount-driven sale events and related ads for some time and is also figuring out new financing methods for discounts.
“Amazon was beating Flipkart and Snapdeal at their own game of discounting deeply so in the short term. Yes, the new regulations will pull back Amazon slightly because it cannot discount and advertise as freely as it was doing earlier,” MD, Wazir Advisors, Harminder Sahni was quoted by E-Paper livemint as saying.
“But over the long term, the regulations may be good for Amazon. It excels at customer service and offering the widest range of products. If the e-commerce game comes back to basics, Amazon will surely emerge as the winner,” Sahni was quoted by E-Paper livemint as saying.