Expect more promotional offers by e-commerce players


June 30, 2016

Ateeq Shaikh, DNA (Daily News & Analysis)

Mumbai, 30 June 2016

The e-commerce sector is likely to benefit from the implementation of the Seventh Pay Commission, but not immediately.

“If the entire amount of arrears is paid it will boost consumption in a relatively shorter span,” said Harish H V, Partner, Grant Thornton India LLP.

But if the payment is staggered, it may take time for increase in sales through e-commerce platforms.

Devangshu Dutta, managing director of Third Eyesight, a retail consultancy firm, said, “The increase in consumption would be over a period of time. In the short term, the increase would be in durables and lifestyle oriented purchases.”

“E-commerce is only a channel and not a different business. It is just a fraction of overall market,” he said.

There also has been reduction in overall discounts and discount-led promotions offered by e-commerce players in the last 12 months, bringing the prices of products nearly at par with brick and mortar outlets.

“There would be promotional pushes, but the same will also be followed by retailers (not having exposure online),” said Dutta.

On Wednesday, the government announced that the Seventh Pay Commission award will cost the public exchequer Rs 1.14 lakh crore during 2016-17. The revised salaries of central government employees are likely to be paid from July 1, 2016. The employees will get arrears for salary from January 1, 2016, but allowances will be paid only from July 1, 2016.

(Published in Daily News & Analysis (DNA))