Call it the Flipkart effect: Amazon India was careful not to make too big a splash as it kicked off the October 10-16 Diwali Dhamaka Sales.
Under pressure from big consumer electronics brands such as Samsung, Sony and LG, the online marketplace steered clear of deep price cuts on the first day, except on products meant solely for sale on Amazon or end-of-life items. Such goods were available at discounts of more than 50%.
Flipkart’s Oct 6 Big Billion Day sale generated a massive rush for products at deep discounts, generating complaints as prospective buyers were unable to get the bargains they wanted, prompting the company to send out a public apology.
But the episode also sparked a backlash from traditional retailers who complained about what they said was predatory pricing, persuading the government to say it would look into the matter. Big brands unhappy about online price cuts also came out in support of traditional retail channels.
With Amazon India seemingly toeing the line, Sony and Samsung have promised to work closely with it, a person with direct knowledge of the development said. Hewlett-Packard India joined other manufacturers in advising vendors not to sell online on Friday. LG, HTC and Sony had previously issued similar trade advisories.
“HP has released a number of offers for customers who purchase through HP authorised partners this festive season. The benefits of these are not available for products purchased from unauthorised HP sellers, which includes some online portals,” said a HP India spokesperson.
Sony, HTC and others also heavily advertised their own Diwali offers, which are available only in brick-and mortar stores. Diwali falls on October 23. HTC India country head Faisal Siddiqui said the company has been persuading all its partners, including Amazon, to maintain pricing.
Offline Retailers Less Agitated
“Our prices are largely intact on all online portals, and wherever it is not, we are constantly having dialogue with them,” Siddiqui said. For instance, HTC raised the issue of its Desire 616 smartphone being discounted on Amazon. Offline retailers seem to be less agitated about the Amazon India sale than about the Flipkart one.
Deals available on the site on the opening day were moderate, said Himanshu Chakrawarti, CEO of The Mobile Store, the country’s largest cellphone retailer.
“None of the popular models were on crazy pricing at least on the first day. However, there were a couple of current models for which we would take up the issue with manufacturers,” he said.
Croma, which runs brick-and-mortar stores and is also one of the leading sellers on Amazon India, did not participate in the Diwali sale. Its agreement with the marketplace ensures that no product listed by it can be too heavily discounted.
“We have a very robust and strong relationship with suppliers and manufacturers and very conscious of their pricing guidelines. Our arrangement with marketplaces like eBay, Snapdeal and Amazon are in the same spirit. Being a Tata Group company, our business is governed by ethics and fair practices,” said Ajit Joshi, CEO and managing director at Infiniti Retail, which runs the Croma chain.
Most of the big deals on the sale’s first day were on brands such as Micromax, Asus, Philips, Pentax and Netgear. Big discounts on Lenovo and Acer tablets were for models exclusive to Amazon. Exceptions were few, such as the Apple iPad Air, HP and Dell laptops, Nokia Lumia 625, Google Nexus 5 and an LG TV model, although big bargains on these were hard to spot.
ET reported Friday that Canon, Videocon and others entered into agreements with Amazon to offer special discounts on models not sold in brick-and-mortar stores, besides persuading it to hold the price line on others to the rate at which offline retail buys from the manufacturers.
