Black Friday in India shows retailers' reliance on discounting

By

Isabelle Crossley

Published
Nov 29, 2018

The growth of the recent Black Friday sale in India shows both the increasing influence of American culture on Indian retail and the increasing importance of discounting for large fashion retailers.

Black Friday, one of the largest sales of the year in the US following the Thanksgiving holiday, is fast becoming a major sale event in India too. A number of Indian online fashion and beauty retailers such as Amazon India and Nykaa ran promotions over the weekend and shipping services like Viabox and Boxinus allowed Indian consumers to shop the US sales remotely. As revenue totals for the sale come in, high totals are expected.

Black Friday came hot on the tails of the recent Dusshera and Diwali sale, India’s largest sale event of the year. According to Red Seer, almost 24 million shoppers made online purchases during those sales constituting a 71 percent increase from last year but many were happy to shop the sales again just weeks afterwards.

According to Anil Kumar of Red Seer, brands in India used the Black Friday sale to grab customers’ attention and that the Black Friday theme was more a way to legitimise a sale than the reason for one. This suggests that, like their American counterparts, large Indian retailers are starting to rely on discounting to keep customers shopping.

The Black Friday sale event was highly successful in terms of sales for a number of participating brands. Online beauty giant Nykaa saw its order volumes increase by five times over the course of its “Pink Friday” sale. However, whilst big discounting events such as Black Friday can increase sales, retailers have noted the possibility of negative long-term impact and reduced brand loyalty. Customers become used to discounted prices, which hits full-price sales later on.

Large retailers in India such as Flipkart and Amazon have been accused of deep discounting, which is a hot topic for the Union Government’s ongoing draft e-commerce policy. The Commerce and Industries Minister Suresh Prabhu has spoken out against the practice of companies investing money in discounting products.The Department of Industrial Policy and Promotion (DIPP) is now in charge of the draft policy and is also expected to tackle the issue of deep discounting.