High discounts no more engaging large consumers, creating a skeptical perception rather

[dropcap]F[/dropcap]or those of you who are avid viewers of Indian Premier League (IPL), it would be easy to recall the new Flipkart advertisement, where a doctor reveals to a friendly patient about his fears of booking a less priced product online. When his friend asks him about the matter? He replies in a skeptical manner, “Nakli nikla toh?”

It is not just a comic ad, but a very popular perception among Indian audience that anything offered online at a lesser price would mean a bad quality product. The latest victim to this perception is Snapdeal.

As a result, Snapdeal has barred sellers on its platform from offering more than 70% discount on the maximum retail price on most products from May 13, as the ecommerce firm aims to tackle the increasing return of merchandise from buyers.

“We have noticed deeply discounted products often do not meet expectations, leading to increased returns and customer dissatisfaction. To improve customer experience, you would not be able to list a new product or update the price of a listed product with more than 70% discount on MRP,” the company said in a communication sent to sellers on May 9.


Sellers on leading marketplaces, including Snapdeal, have been complaining of increased returns by buyers due to the “no questions asked” return policy of the ecommerce companies.

Sellers see increased returns as a logistical nightmare, where the inventory is stuck in transit for long time and causes accounting errors.

A Snapdeal spokesperson told media that this is a way of providing consumer insights and assisting the sellers in making a sale.

“In this instance, we have shared with our sellers that any discounts that the consumers perceive as unrealistic may adversely impact the consumer perception about the quality of products.”

“Laying down the operating rules on our marketplace and providing market information is an ongoing activity. The price is determined by the sellers based on various inputs they may receive from multiple sources, including from us,” the spokesperson said.

Devangshu Dutta, chief executive of retail consultancy firm Third Eyesight, thinks Snapdeal’s strategy might bode well with India’s new foreign investment policy in ecommerce. Sellers however won’t like it.

“The intent of the new ecommerce policy is clear. The government wants to control deep discounting. So the government may not have any problem with Snapdeal’s diktat. However, since this policy is influencing the prices, sellers could challenge it,” Dutta said.