New strategies by online shopping companies to attract customer after ban on discount by government

On April 1, the government ‘s Department of Industrial Policy and Promotion (DIPP) banned discounts by online marketplaces. Online platforms could no longer use cash to subsidise products or offer deep discounts. Suddenly, Jabong discovered that the data was going to be extremely useful. Digging into the data and putting to use algorithms, the company began to offer what people actually buy instead of carpet bombing them with an excess of items.

Jabong has since reduced the number of brands available online to around 1,500 from 2,500. The number of genuine shoppers — who actually buy — has risen. Conversion rate, a measure of the number of people who buy something from every 100 visitors, has jumped from 1.7% to 2.12%.

Last week, started a fashion e-magazine and fashion blog to “complete the ecosystem for shoppers” to ensure they don’t go elsewhere for the latest trends and end up buying on the e-store. Flipkart, meanwhile, is mulling pre-approved loans to help customers make purchases under a ‘buy-now-paylater’ scheme to prepare for the upcoming festive season.

Adds Paytm’s Sharma, “Our (marketing) spend is around 7% and we plan to reduce it. The focus will be more on customers who are used to buying and how we can serve them better to ensure repeat purchases.”


Source : Economic Times

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