The Veracity of Discounts During E-commerce Sales in India: An In-depth Analysis

During the recent festive season sale in India, online retail giants like Amazon India and Flipkart rolled out aggressive discounts, flash sales, and cashback offers. However, are these discounts as beneficial as they seem?

Setting Expectations

As the festive season approached, many Indian shoppers were keen to seize the opportunities presented by these e-commerce platforms. Among them was the author, who was looking to find a new phone as a gift for their mother, optimistic about landing a bargain deal. However, a common sentiment among Indians is skepticism about the actual benefits of these discounts. This skepticism, often shared by elders, argues that the discounts are mostly “in name only,” with sellers merely marking up prices to create the illusion of savings.

For instance, the author’s mother had voiced this concern: “Most of the discounts are nothing more than a marketing ploy. The seller simply marks up the price and makes you feel like you’re getting a good deal.”

Tracking Discounts: A Closer Look

To verify these claims, a team from an e-commerce data and artificial intelligence company, Semantics3, conducted a thorough analysis of pre-sale discount strategies. The findings will provide insight into whether the apparent discounts translate into real savings for consumers.

Mobile Phone Brands and Aggressive Discounts

Mobile phone brands like Apple and Google did not exhibit significant changes in discounts before and during the sales. However, other brands such as Nokia, Samsung, LG, and Motorola were aggressive in their discount strategies. Nokia, for example, increased its average discount from 18% to 54%, indicating a significant boost in promotional efforts. These changes highlight the competitive landscape in the Indian e-commerce market, where brands are continuously vying for consumer attention.

Examining the True Value of Discounts

The core of the debate centers around the actual value of the discounts offered. Often, discounts are advertised against a list or sticker price, which is assumed to be fixed and indicate genuine savings. However, Semantics3’s research sheds light on the variability of these prices.

Dynamic List Prices

The team tracked list prices for a variety of products before and during the sale period. Notably, list prices for brands like Apple, Motorola, and Samsung showed significant fluctuations. For example, the author noticed that the list price for the Apple iPhone 7 Red increased by 42% during the sale, and the iPhone X Silver was marked 4% higher compared to the pre-sale list price.

Further examination of the hourly changes in list prices revealed that they can change drastically. The list price for the iPhone X Silver 64GB, for instance, varied by as much as Rs15,000 between peak and trough periods. This suggests that sellers might manipulate list prices to enhance the perceived discount, creating a psychological anchor point that drives consumer action.

Taking Discounts with a Pinch of Salt

The analysis points to a concerning phenomenon: list prices can be deceptive and are sometimes altered deliberately to provide an illusion of a better deal. To ensure genuine savings, consumers should be skeptical when using list prices to judge the worth of a deal. It is crucial to approach these discounts with caution and to consider the actual change in the list price before making a purchase.

Conclusion

The recent e-commerce sales in India have shown that while discounts are tempting, they may not always be as significant as initially perceived. A deeper look into the dynamics of pricing reveals that list prices can fluctuate significantly, and brands might manipulate these to create an illusion of savings. As a consumer, it is essential to be aware of these practices and to approach discounts with a critical eye.