Retail Market Swings: Coupon Codes to Stay and Flourish

“E-commerce businesses are becoming more disciplined about their operations, they are burning less cash, they are improving their customer experience, and this Diwali season will be a very good indication of how the market is growing,” Nandan M Nilekani

India has witnessed one of the most rapid growths in e-commerce sector through the launch of online websites, increasing startups. In a couple of years there have been such vast expansions in the sector where I feel there is no looking back. Especially when talking about India, where the startup industry has just began to flourish. There have been various reasons for its growth; most basic is the extensive use of internet- be it mobile internet or through the mobile applications. As the experts say that the e-commerce businesses are becoming all the more disciplined about their costumer services as they are very well funded and have enough capital that can carry on for a couple of years. . Whereas with campaigns like ‘Digital India’ and ‘Make In India’ coming up we surely are going to see a rise in the trends of the e-commerce sector.

This growth has led to more and more use of mobile internet and the coupon code companies are leveraging on this rapid wave. CollectOffers, CouponDunia are among few websites that offers discount coupon codes and voucher codes for nearly 2000+ online merchants alone in India. They provide digital discounts that can be used by the consumers while their online shopping.

Although there have been several forecasts made that the discount coupon codes may not flourish and succeed in India. But for now the statistics show a different phase altogether. As the Forrester report, “with a compound annual growth rate expected to be at 57 per cent between 2012 and 2016, the coupon sector is set to exhibit maximum growth.”

The data clearly shows us that the e-commerce industry will gradually walk towards growth rather than sloping down in the graph in the coming couple of years. This will eventually result in severe competitions among the e-commerce business websites, providing space for the discount coupon codes.

Competition among the businesses brings a lot of things into consideration. We all are aware that any kind of business involves taxation process. However, there had been cases where the tax has played a crucial role. One of them was when Kerala and Bihar governments had initially imposed taxes on the dealers which led to hike of products for both the dealer and buyers. “The additional entry tax was an anti-consumer move, leading to price inflation and depriving users of full benefits of online shopping.” An entry tax made it more expensive for e-commerce firms such as Flipkart, Snapdeal and Amazon to ship products to customer from outside their home state. For instance in Bihar, a product ordered within the state but being delivered from outside would attract both a central sales tax and an entry tax.

Moving on to the threats and the tough competition that various websites pose to each other. There have been statistics to show which website is leading in the various aspects including consumer services. There was a survey conducted by RedSeer and according to an article in Mint, “The second version of the RedSeer E-tailing Leadership Index (ELI) shows, Flipkart with a score of 95 was ahead of Amazon at 87, while Snapdeal came in a distant third at 66. Paytm was close to Snapdeal with a score of 65, while ShopClues and eBay India scored 59 and 56, respectively.” The survey considered three broad metrics: trust in a brand; product assortment and prices; and the overall buying experience in terms of ease of using the e-commerce platform, delivery speed/consistency of orders and ease of product returns or cancellations. It does not reflect sales performance or losses. From the first survey, Flipkart and the three other Indian start-ups, Snapdeal, Paytm and ShopClues posted significantly improved scores. Amazon India retained its high score of 87. All of this is partly because there is a change in the ELI methodology. Compared with the first survey, Flipkart offered a significantly better web and mobile app browsing experience and retained its status as the most recalled brand in e-commerce. The company has also cut down its product delivery time. Flipkart’s net promoter score (NPS) is improving, helped by returning to a largely inventory-based model, giving the company more control over product quality and delivery speed and consistency. NPS is a key metric of customer satisfaction.

Well, these numbers will be a lot of help to provide us a glimpse as to who the consumers trust more. Flipkart is leading the chart and will be expected to show a higher growth in sales rather others. While Amazon poses the nearest threat to Flipkart, it would be clear only after the Diwali sales that who has won at the end till then the prediction and mystery will continue.

According to the above data the e-commerce business flourishing at such a high rate it is hard to expect their failure. As they are flourishing therefore it brings in the competition among different companies. Already we have talked about India’s leading websites- Flipkart, Amazon and Snapdeal posing a great threat to each other. The competition leads to the race to capture huge number of customers towards them. Now the question is how will they be able to do so? What is it that the customer need? The answer is simple and confined. The customers need great service and most importantly things at best deals. The market is filled with so many e-commerce websites and to grab the customer’s attention all that is needed is discounts which we are able to see at a very vast expand during their sales. The festive season is on, and all the three websites and many others are out with their respective campaigns to shower discounts to the consumers. Some market experts are talking about a three-fold surge in sales next month as festive buying peaks in India, some others talk of five-fold growth, while the industry experts believe an expected surge in orders next month may just about put the industry’s volumes back to last year’s levels – sales of India’s e-commerce market have been moderate for first six months of this calendar year. Anyhow, while many believe in a manifold increase in orders this festive season, RedSeer says that sales this October will not be much higher than those seen during the 2015 festive season. And annualized GMV (gross merchandise value or the total value of goods sold) for e-commerce companies fell 5 to 10 per cent in the second quarter of 2016 so from there, it would be 8 to 10 per cent growth. Therefore, the most important factor that would play a prominent role for the battle to be won among the websites will be the discounts they provide. Simultaneously the discount coupon codes and voucher codes come into the scene where the consumers get additional discounts. Who does not love discounts?

Let us have a look at some of the statistics which tells us about the coupon code industry, according to the ComScore report in the year 2013, mobile internet use resulted in a 14.2 per cent growth of traffic in the Indian online retail market. The coupon business is 13.5 per cent of the total e-commerce audience in India, growing at the rate of 62.9 per cent with 7.6 million unique users a month. In 2011, 1 in every 10 internet users accessed coupons sites, but in 2013 this number had grown to 5 out of 6. Ninety-five per cent buyers search for deals online and 74 per cent view the coupons available at couponing portals.

All these statistics and data in short provide us with the answer to the question,” Will the discount coupon codes and voucher codes retain its position in the industry?”  Yes, they will flourish and will not disappear since they provide total benefits to the consumer and by the end of the day e-commerce sector rely on the consumer satisfaction.