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Major e-commerce players decide to bring down coupon discounting to 20% by the end of 2015

In a bid to contain losses, major e-commerce players, who over the past couple of years lured millions of Indian consumers to shop online by offering deep discounts, have collectively planned to cut the high discounts through coupons. 

In a bid to contain losses, major e-commerce players, who over the past couple of years lured millions of Indian consumers to shop online by offering deep discounts, have collectively planned to cut the high discounts through coupons. 

Flipkart, Myntra, Jabong, Snapdeal and Amazon, among others, have unofficially decided to bring down coupon discounting to the global levels of 20% by the end of this calendar year, reports the Economic Times, citing industry insiders.

“Many of us have met and discussed on it a while back, particularly about coupons,” an undisclosed e-commerce company executive told the Economic Times. “We took certain step and that’s what you see now.” 

In the last six months, e-commerce companies have brought down the range of discounting through coupons on various products from as high as 40% to about 30% currently. Now they plan to bring it further down to global average of 20% in the coming months.

“There was a time when we were creating market using it (coupon discounting) as an incentive to make people come on board. Now we do think it is time to bring it to normal level,” the executive was quoted in the report as saying.

According to the report, online retailers believe that it is about time the e-commerce companies clamp down on discounts that is hurting businesses. As this kind of discounts are not sustainable in the long run. 

A Snapdeal spokesperson was quoted in the report as saying, “Since Snapdeal is an online marketplace that connects buyers and sellers across the country, the pricing decision solely lies with the seller listing the product.” 

According to the report, since Diwali the amount of coupon discounting has come down “Coupons discounting have for sure reduced,” Aman Jain, Co-Founder of coupon site GoPaisa.com. “Some four months ago, typical coupons were 35-40% discounts. Now, coupons are no more than 25-30% discounts and the frequency at which they were doling out new coupons has reduced quite a lot lately.” Jain attributed the cuts in discounting to online companies’ quest to turn profitable.

In India, online retailers have incurred losses of about Rs 1,000 crore over the years due to heavy discounting, according to a report by PricewaterhouseCoopers. 

 

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