E-commerce giants like Flipkart, Paytm, Snapdeal etc are attracting consumers by burning their cash in terms of discounts, cashbacks etc. and attracting supporting business models as well.
India’s brick-and-mortar giant Future Group is pointing major e-commerce on their business model. Future Group Founder, Kishore Biyani has decided to target Flipkart, Snapdeal and Amazon in a series of ads. This is probably the first time a brick-and-mortar retailer is participating in comparative advertising against online rivals, which have been grabbing share by discounting products.
The ads are playing on the e-commerce giants’ names, twisting them to sound like Flip the Cart, Snap the Deal and Amaz-Off.
And advertising is not the only space where the Future Group is targeting the e-tailers. Store employees are seen wearing T-shirts with messages like ‘My deal got snapped’ and ‘My cart got flipped’, in what many people are seeing as psychological warfare.
“We just want to prove the point that both our merchandise assortment and pricing are better compared to online companies. We need to make consumers aware of this fact. Brand Factory’s gross merchandise value (GMV) in the year to March 2016 was Rs 3,500 crore. Future is India’s biggest listed retailer,” Future Group CEO Kishore Biyani stated.
After nearly three years of deep discounting, most online sellers are now pulling back from this strategy in a desperate effort to shore up their finances, making them vulnerable on this front.
The combined losses of the three leading online companies — Amazon, Flipkart and Snapdeal — overfed to Rs 5,052 crore in FY15 from Rs 1,000 crore in the year before as they sought to build market share. At the same time, several brick-and-mortar retailers clocked double-digit same-store sales growth last year, a reversal from the trend in 2014 when physical stores reported subdued demand as e-commerce players wooed away consumers.