Discounts may not be Viable for E-commerce cos in Long run:PwC

By Gizbot Bureau

E-commerce companies have incurred combined losses of around Rs 1,000 crore due to heavy discounting strategy and this model is not feasible in the long run, a PwC report said.

"Offering lower prices will not be viable in the long term. Despite luring in customers in the initial stages, lower prices won't be able to retain customers in the long run.

While the discounting will continue for some more months, e-tailers are thinking beyond discounts to acquire customers and build loyalty," the report said. The combined losses faced by e-tailing companies as a result of their discounting strategies now stand at almost Rs 1,000 crore, the report said without giving the timeframe for these losses.

Discounts may not be Viable for E-commerce cos in Long run:PwC

Recommended: Top 10 Smartphones Launched This Week

Out of a total of 1,005 respondents surveyed as part of the PwC study from India, almost half the respondents said they preffered to shop online due to better deals and discounts offered by these retailers.

"A majority of e-commerce players are start-ups and, therefore, are working towards rapidly scaling up their market share. They have been aggressively planning and implementing discounting strategies, which would make the customer sit up and take notice," it said.

Pointing out that price has emerged as the biggest differentiator driving consumers to shop online or in-store, it said the customer habits have changed, as they are used to discounts throughout the year.

Recommended: GizBot Giveaway: Enter to Win Free Gionee Elife S5.1 This Valentine's Day

The PwC report said the 'predatory' pricing strategy of e-commerce companies isn't helping their stand with the premium brands. It found that with valuations of e-commerce companies skyrocketing, there is increasing pressure from investor firms to cut down on discounts and concentrate on making profits.

Source: PTI

Most Read Articles
Best Mobiles in India

Read More About: discounts e commerce websites news

Best Phones

Get Instant News Updates
Notification Settings X
Time Settings
Clear Notification X
Do you want to clear all the notifications from your inbox?
Yes No
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Gizbot sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Gizbot website. However, you can change your cookie settings at any time. Learn more