Impending GST regime precipitates heavy discounts in online and offline stores

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Impending GST regime precipitates heavy discounts in online and offline stores

Sushmita Dey | July 01, 2017 11:40 hrs

With the Goods & Services Tax (GST) about to drive us up the wall in certain areas from 1st July, all online shopping sites have come up with a blast of sales. Myntra, one of the most trusted online outlets, had started its end-of-season sale with huge discounts on famous brands like Nike (40-60%), Puma (50-70%), Roadster (40-70%), US Polo Assn. (40-60%), WROGN (40-60%), Jack & Jones (50-70%), Mast & Harbour (40-70%) Spykar (Min 50%), Levis (40-60%), Adidas (40-60%), etc. Favourite women’s brands like the Vero Moda (40-70%), Forever 21 (20-50%), W (30-50%), Biba (30-60%), All About You (40-60%), Dressberry (50-70%) also have offered heavy discounts. Myntra has again brought forward its GST sale with 50-80% off on the best of men’s and women’s fashion.

On the other side, Jabong is also speeding up giving the best of offers before GST hits. Jabong has asked the shoppers to gear up to shop more with Rs. 200 off on a spend of Rs. 999 and Rs. 500 on a spend of Rs. 1999. Not only this, it is offering its buyers discounts ranging from 30-70% on the most popular brands.

Snapdeal has also unboxed its pre-GST sale after its season sale to off-load its old stock before GST kicks in. No different is the case with Amazon. With the shopaholics going gaga over the attractive online offers and discounts, the malls of Guwahati have also given out heavy discount on sales to give a hard competition to the online shopping sites. 

To take note of the whole thing, when G Plus visited the leading malls of Guwahati, the sale fever was not missed. Big Bazaar was offering 50% off on both women’s western and ethnic wears, 40% discount on footwear, flat 30% off on Ivory Tag hand bags, special offers of Ivory Tag sunglasses, buy 1 get 1 free on Ivory Tag jewellery section. Offer on daily use churidars were 3 for Rs. 799 and 2 for Rs. 599.  Similarly, attractive offers were noticed in the men’s fashion section also. Buying Lee Cooper jeans worth Rs. 1990-Rs. 1999, they were giving a free T-shirt worth Rs. 499, 2 Polo T-shirts for 699 worth Rs 499 each, 2 Tees for Rs. 499, buying any Buffalo item, a free pair of buffalo sunglass worth Rs. 1690, buy one get one jeans worth Rs. 1499, Rs. 200 off on Lee Copper jeans worth Rs. 1490 or Rs. 1499. 

Similar was the scene in Reliance Trends. Every section was offering discounts of 40-50%.

G Plus visited the Pantaloons showroom in the newly constructed Roodraksh Mall. One of the customers’ attendants gave us an insight to the entire discount areas. Sale signage of 50%, 30% and 20% were prominently visible, besides buy 2 get 2 offers on brands, 50% discount on bags, 50% discount on cosmetics, buy 1 get 1 jewellery offer, buy 2 get 1 and buy 3 get 2 on W brand, 20% discount on Sarah jewellery items.  

“Most of the time, people find online mode of shopping easier to find things because of the filtering and sorting options available. We often waste a lot of time looking for stuff in the malls. There might also be times when we won’t even find what we are looking for. If we have to roam around in the malls looking for our desired stuff, in online shopping also we have to wait for 4/5 days in Guwahati to get our product delivered,” said Abhijit Sharma, a random shopper at Big Bazaar, Guwahati.

G Plus visited the W’s showroom in Bhangagarh where offers like buy 1 get 20% off was there which was quite less than the online deal of W whereas Myntra and Jabong were offering 30-50% discount. Talking to sales officials of Puma, it was known that they are offering a discount of flat 50% where online outlets are offering discounts up to 70%. Now the question arises: why such difference between the two modes of shopping? Some of the commercial experts hold the view that retail stores, malls or showrooms do not or cannot offer the same deals in their brick and mortar stores as the online stores because there is a huge cost attached in running an establishment. Factors such as rent, electricity, payroll, fixtures and shrinkage loss all contribute to the gross margin and overheads of doing business in a shopping centre. But when we talk of costs on online outlets, they just need warehouses to stock their products.

When G Plus had a conversation with one of the Biba showrooms in Guwahati, we were told, “We never compete with online shopping sites. They are doing what is viable for them; we are doing what is viable for us.”

But the fact remains that if one is getting a product worth Rs. 2000 and the same product at a discount of 60% online, the cost of the same product comes to only Rs. 800 making it pretty obvious that one would go for the online purchase. Yet, there are people who prefer offline over online.

Since tangibility is not there in online shopping, it is not possible to check the product’s quality by touching the product. “Many a time, it has happened with me that the colour that was shown online was completely different from the product that I received,” said Kakoli Phukan, a random shopper in Guwahati. Retail outlets are at the edge because buyers are offended by factors like fitting and colour issues, extra shipping charge, defective products and privacy issues.

Apart from these, shopping with friends or family helps in socialisation. “I am a big online shopper but one thing I have to admit. Earlier I used to go out with my mother and sister to shop and it was really fun when we explored shop after shop, had pani puris and ice creams while coming back home. I miss those days because I am totally hooked to online shopping now,” said Sreeparna Dutta, a resident of Guwahati.

Stores can gain an edge if they go online. The growth of e-commerce has been posing a serious threat to brick and mortar stores. Having both physical and business edge over online will act as a silver lining for the offline stores. 

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