KOLKATA | NEW DELHI: The Flipkart-Amazon-Paytm Mall discounting frenzy this festive season has a new breed of online buyers — neighbourhood cellphone stores and kiranas, which are buying products from these websites to resell them to consumers later at market prices.
Many of these brick-and-mortar stores have created 5-10, or even more, user accounts on these e-commerce platforms to overcome restrictions on the number of discounted units and cashback that a user can avail of, four senior industry executives said.
These small offline traders have accounted for more than 20% of the total sales of smartphones and FMCG products by online marketplaces this festive season, they said. In most cases, the prices that the e-commerce sites are offering are either below or at par with those at which offline distributors procure stocks from the brands, they added.
The most popular smartphone brands which are lapped up by such traders include the iPhone, Oppo, Vivo, Redmi, Motorola and Samsung, which are available on either deep discounts on Amazon and Flipkart or on massive cash backs on Paytm Mall. In FMCG, retailers are mostly buying hi-value and bundled packs across categories like detergents, soaps, sanitary pads, diapers, sauces, chocolates, juices and snacks on which the discounts are the highest.
“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 Retailers Association of India, chief executive, Kumar Rajagopalan. It is difficult to understand how the sellers on the marketplaces are able to sell at such low prices and the association will take it up with the government, he added
Emails sent to Amazon, Flipkart and Paytm Mall did not elicit any response till press time Sunday. Paytm Mall had earlier said it would spend Rs 1,000 crore on marketing, cashbacks and promotional spending during the festive season. Some companies like Lenovo-Motorola and Xiaomi supported the brick-and-mortar retailers by offering discounts for offline customers on their popular models to match the online prices during the first sale at Navaratra and during the current Diwali-Dhanteras offers.
FMCG companies, in fact, are seeing a repeat of the trend when retail chains used to offer a massive discount during the early days, prompting kiranas to buy from them. However, this time the discounts are much higher.