Ecommerce discounts and customer loyality

The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.

Mayank Goel, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur


Customers today look for online offers on a daily basis and it has become a habit. The problem is that the companies who started this are now moving into loses while acquiring customers.
The major issues that e-commerce companies are facing today include:

Customers returning products: Due to the poor quality and juggling mentality of Indian customers.

30 days Return Policy- No questions asked: Well if we are buying something offline do we have a 30 days return policy? The answer is NO.

Payout Policy to Vendor Companies: Due to the above policies a lot of vendors are having success stories, but, more than that people have shut their shops and are not interested in selling online.

Cash on Delivery: It seems to be easy but if you are ordering for a bigger ticket size and you are not residing in one of the Tier I cities then probably the order won’t be taken. Moreover there is a threat at a lot of places and logistics companies have stopped working in few states because of the threat on COD orders. A lot of orders are not received by the customers when delivery boys call them up. So COD is the most risky segment.

Customer is not loyal: If you are looking for a loyal customer online you won’t find that because he/ she is only attracted to sites, which gives more discounts.

Products sold below the manufacturing price: The issue is that we have seen in alot of cases that goods are sold below the manufacturing price because of the heavy discounts. Hyper Retailers have been into a menace since then.

GST is on hold: A centralized taxation would help in the pricing and moreover would help in a flat pricing in the country. Still the same has not been passed and is just on papers till date.



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