In pre e-commerce days , retailers used to buy goods from wholesalers and sold those in local shops with MRP or approximate value. In this new era of e-commerce there is nothing like local shops, but a new trend has begun " e-tailer" (Electronic Retailer). Due to multiple "e-tailers" the competition is increased.
This competition between e-commerce companies are attracting customers with their huge discounts; leading to huge losses. According to a report by global research and advisory firm, PricewaterhouseCoopers (PwC), e-commerce companies have incurred combined losses of over Rs 1,000 crore.
Attracting customers with low or discounted prices and killing the competitor by bearing some loss is old and good tactic, but in e-commerce sector it is not feasible as competitors are continuously emerging. Therefore, offering huge discounts will not be feasible in long terms, also lower prices won't be able to retain customers in the long run as there is always some one to offer lower price than previous.
To gain loyal and returning customers, e-tailers should think beyond discount. New marketing strategies might help to cope up with other e-commerce companies and lead them to be a pioneer. The new strategies will be subject to business domain and solely depend on business consultant or consultancy firm.
(Consulting e-tailer) Vishal