Marketing Strategy after Discounts Ban on eCommerce Retailers by Indian Government

What?? The Indian government banned eCommerce retail stores for the discount. Unfortunately, that’s true. Earlier in this year, Indian Government banned the heavy discounts and created a set of strict rules on e-commerce stores that officially tackle the aspects by which foreign direct investment can enter the e-commerce industry.

Considering the new guidelines that came with some devastating emanations for two of the foundational pillars of India’s online retail industry, the Department of Industrial Promotion and Policy (DIPP) stated 100% FDI AKA; Foreign Direct Investment in the model of the online retail industry.

This may happen because of the biggest takeaways by “Big-Billion Sale” after which DIPP outlawed the heavy discounts and predatory pricings. That’s because of the demand of the consumers burnt millions of dollars in venture capital money. – HAH!! Who can expect this o.O? Anyways!

Here are the two most important guidelines involved:

  1. E-commerce entities providing marketplace will not directly or indirectly influence the sale price of goods or services and shall maintain a level playing field.
  2. An e-commerce entity should not permit more than 25% of the sales effected through its marketplace from one vendor or their group companies.

Now the question arises. How eCommerce retail owners may explore new digital marketing strategies to attract their woo customers for more product purchase with lower discount offers.

Here’s How!!!

If you remember, in some past rent years, one of the biggest e-tailer Jabong has been assiduously collecting the data for the users visiting their website which is now a very common practice in almost all the products offering websites and now even some service providers opt this strategy.

The basic idea was to collect behavioral information about customers and its habits: Regarding, why do they come to their website for, What stuffs they browsed, their likes and dislikes and the entire procedure from starting till a customer buy any product they recorded the data for all those notes. Eventually, they are able to compile the data for about 8 million shoppers who bought any item from their eCommerce platform. – Isn’t it crazy!!!

Well, It’s now actually! There is a popular saying in digital marketing “Hard work only pays off when it meets the right plan of action.” And that’s what some big brains of Jabong did.

After the news of the discount ban on eCommerce industries, the data which Jabong collected for years suddenly became a great help for their re-marketing campaigns and that’s the point where they discovered the valuable usability of the user behavior data.

What they did!! They simply started discovering the people who actually bought some stuff from their platform and started offering them only those products which users bought the most instead of creating baffle with an excess of items.

That was actually a great idea of promoting a wide range of products and to attract customers even with low discount offers. Because the data of 8 million customers is not that small and eventually contains a wide range of products on which users may show their interest to buy them again.

There were some very clear instructions from the Indian Government: If you violate the terms & conditions, you run the risk of (falling foul of the law). And, if it happens then we will take care of how to deal with it,” Said by DIPP secretary Ramesh Abhishek.

Despite those strict instructions, Jabong followed their strategy without breaking the government new conditions over e-retailers, which resulted in the decrease of available online brands to around 1,500 from 2,500.

This further resulted in a tremendous increase in the total number of genuine online buyers and increased the number of online shoppers who actually buy products online.

And, all this became possible for them because, they just focused on selling some of the top 25 options of shorts from top 30 brands containing around 750 options to select from, instead of peppering the site with 100 options from top 300 brands and have consumers filter and hunt through 3,000-5,000 options of shorts. That’s how top department stores behave.

The eCommerce conversion rates increased from 1.7% up to 2.12%, which are some great measures for such a big online marketplace.

Amazing Marketing Strategy… But what was the main aim behind all those rules and regulations of not using predatory pricings? And what you got to learn from the marketing strategy applied by Jabong?

Here is the Answer: These rules may mean to increase the liability of online retail stores. Because, if a customer receives a bar of soap instead of getting the smartphone, which he ordered, then the customer will for sure find it difficult to get hold on faith for any of the major e-Retail stores and that’s what Jabong proved by offering the products of only top selected branded and that too of good quality. Hence, overloading the shop with lots of stuff doesn’t help to maintain customers trust neither it helps to increase the sales.

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