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Amazon's big-week sale begins smoothly

By Digbijay Mishra and Anusha Soni
October 11, 2014 13:07 IST
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This file photo shows CEO Jeff Bezos talking with reporters at a press conference in New York.Amazon, the $75-billion American e-commerce company, opened its week-long Diwali sales on Friday, with an absence of buzz or noise.

This was only four days after many aggrieved buyers chose social networking sites to attack Flipkart’s ‘Big Billion Day’ discount this Monday (October 6), followed by an apology from the company’s co-founders, Sachin and Binny Bansal.

At the end of day one, Amazon claimed its sales had risen 200 per cent from its previous peak on October 6 (the day Flipkart had its blockbuster sale).

Several 1,000 orders came per minute from across the country specially from smaller cities such as Coimbatore and Visakhapatnam, with consumer electronics recording the biggest sales, followed by home and kitchen category, shoes, books and apparel, according to the company.

Flipkart had said it had notched up $100 million in gross merchandise value in 10 hours on its big-sale day.   

Amazon announced flat discount offers on categories compared to Flipkart’s flash sale policy that had more product based price cuts.

Even so, in real terms, even Amazon’s category discounts varied widely from one brand to another and one product to the other.

For instance, a flat 30 per cent in mobile phones could mean anything from five to 10 to 30 per cent. There were products in this category where there was a zero discount.

Amazon scored on other fronts. It was allowing returns of products even during the sale period, unlike Flipkart.

And, many buyers Business Standard spoke to said the American company was processing the deliveries faster.

Amazon was not trending in the social media, unlike what Flipkart was earlier this week, many buyers said.

That could indicate a more professional or experienced way of doing things but was also a sign, said experts, of Flipkart’s higher popularity in the India market. Flipkart began as an online bookstore in 2007 and then expanded to other categories.

Amazon launched its Indian e-commerce business only in 2013. That makes Flipkart a better known brand in India, generating higher expectations in deals and discounts.

On the other hand, Amazon comes to India with close to 20 years of global experience in the segment, setting it apart from their competition.

“They (Flipkart) are seen as more street-smart a brand when compared to Amazon, which is known internationally for quality service and consumer satisfaction rather than discounts,” argues Santosh Desai, managing director, Future Brands.

As a company, Amazon’s stated take on competition is interesting. Its founder and chief executive, Jeff Bezos, on a recent visit to India, said: “We don’t spend time thinking of competition.

"Rather, we obsess about our customers.’’ Bezos said this in response to Flipkart’s prominent advertisements on its Big Billion Day sales.

Yet, soon after, Amazon unleashed its own campaign on how the company did not believe in only a day-long dhamaka (sensation), taking on its biggest competition in India.

Meanwhile, Snapdeal, another leading e-commerce company, stuck to its position as a challenger.

On the day of the Flipkart sale, Snapdeal had promised to match its rival’s discounts.

On Friday, again, Snapdeal came out with banner ads, asking buyers to check its website before proceeding anywhere else, clearly referring to Amazon.

Analysts said the discount spree on Amazon and Flipkart showed no clear win for either.

For example, a Nokia Lumia 520 was being offered for about Rs 5,500 on Flipkart on Big Billion Day; it was also on sale at Amazon on Friday for about Rs 9,000.

On the other hand, on the Flipkart sale day, similar products on Amazon were being sold at lower price points.

Amit Agarwal, country manager & vice-president, Amazon India, said they’d been getting an overwhelming response from customers since the morning, for the deals and offers being introduced every hour as part of the sale week.

Image: This file photo shows CEO Jeff Bezos talking with reporters at a press conference in New York. Photographs: Peter Morgan/Reuters

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Digbijay Mishra and Anusha Soni in New Delhi
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