By Sakshi Upadhyaya
Edited by Nandita Singh, Senior Editor, The Indian Economist
The highly publicized mega sale “Big Billion Day” of e-commerce giant Flipkart concluded recently. The biggest ever sale in India, as Flipkart claimed, was compared to the likes of the mega “Black Friday” sale in the USA. According to reports, Flipkart managed to earn around Rs 600 crore from the sale, but in spite of generating such massive profits, it mostly faced criticism on social media from customers all across the country. So much so that people reported it to be nothing more than a marketing gimmick for the sake of increasing their customer base. Many even went to the extent of calling it a huge pricing scam.
The build up to the deal consisted of television endorsements, front-page bulletins in newspapers and ads flooding social media. The Flipkart marketing team left no stone unturned in mass publicizing the mega sale, and it definitely reaped them rewards. Such was the response and enthusiasm, that right from the moment it started, thousands of people sat glued to their laptops and smartphones for hours competing for the limited stock of reasonable and discounted items. However, the process wasn’t hassle free, and customers largely remained discontented. The site also crashed due to overload and technical glitches.
Moreover, customers reported that the products that were advertised in newspapers were not available on the website. Many customers, attempting to purchase items, were greeted with sold-out messages and recurring server errors. Many items were listed out of stock even before the deals began. People reported that the discounts offered on several items reduced with time and when they tried to place orders, products in their virtual carts vanished magically. One customer, through a programming script, found that the items under ‘Steal Deals’ were always listed as being out of stock. The ‘Steal Deals’ were most likely used as a marketing ploy. People jumped on to the next deal as soon as they saw the items of the current deal running out of stock, fearing they would have to buy the available items at a higher price later. This strategy however worked for the company as customers placed more orders due to the first-come-first-serve basis.
Many customers claimed that prices on the website were inflated over the past couple of days and therefore the discounts running were inauthentic. They also complained that Flipkart used an immoral technique to mislead people. In spite of such widespread criticism, the “Big Billion Day” managed to generate a huge buzz and yielded large profits for Flipkart, but in turn the e-commerce giant may have lost its credibility, trust and customer satisfaction created through a loyal customer base. People felt cheated and started looking towards alternative options such as Snapdeal.
Was Flipkart wrong? Did they really cheat their customers? If yes, then on what grounds? What was the strategy behind this move? Lets analyze a little to find out the truth.
The online e-commerce industry in India has grown tremendously over the last decade and competition over recent years has grown intense. Many players have emerged in a battle of supremacy to take over the Indian market. Just recently Flipkart announced that they would invest $1 Billion in India. In reply, Jeff Bezos, CEO of Amazon, announced that they would infuse double that amount, i.e. a whopping $2 Billion into its Indian arm. Thus Flipkart, already a common household name, may have been at the helm of affairs since quite some time, but is facing very stiff competition from other websites such as Amazon and Snapdeal. All of them offer a complete range of products varying from clothes and fashion accessories to electronic goods and items. With the festive Diwali season round the corner, there is fierce competition among these companies as to who would take maximum advantage of this peak sales season. For that to happen, they must provide lucrative offers and depend upon the trust shown in them by their loyal customer base. The question however, is how does one go about creating this customer base? This is where a successful sales campaign such as “Big Billion Day” plays its part. India is a price driven market where the price of an item generally plays the most significant role in its sale as compared to other aspects. The words ‘discount’ and ‘sale’ grab a lot of eyeballs, so this strategy is generally employed by companies to lure people towards buying items from them. This is the strategy Flipkart employed too. More importantly, rather than selling a large number of items just in the present, they wanted their brand name to be etched into people’s minds so that there would be high possibility that people would be willing to buy products from them in the future. Going by the enormous buzz generated on social media platforms, be it positive or negative, they have definitely succeeded in their mission. The display of a vast variety of products just before Diwali must have also revived enthusiasm among their customers and prospective buyers. For the record, Diwali is the season of maximum sale witnessed in the whole country.
Many customers accused Flipkart of implementing an age-old immoral technique of deceit by inflating their prices and then pretending to offer huge discounts when in fact they were selling them at around their original prices. It may be wrong on moral grounds, but legally there is nothing wrong with it as long as all products are sold within their maximum retail prices. However, being the giant that Flipkart is, it earned its reputation and rose to its present status only because of the unflinching trust and loyalty that its customers have in it. Such unscrupulous acts of desperation for surviving the fierce competition would backfire in the longer run, as its customers are already losing faith in Flipkart’s reliability and plausibility. Acts like these raise an extremely basic, yet vital, question, as to whether acquiring the number one position is of foremost importance, or does abiding by your ethics and living up to the trust of the people take precedence over profit? People need to be aware and do some serious analysis first rather than getting swayed by petty marketing tricks.
Sakshi is a pre final year student pursuing mechanical engineering from RKGIT, Ghaziabad. Passionate about sports like badminton and tennis, she is an ardent reader and dreams of building up her personal library. She firmly believes that the pen is the mighty sword that can instigate social reformations.