Grocery brands, which see one of the highest discounting online inviting the wrath of the trader lobby, have raised the red flag on the revised ecommerce rules that seek to stop cashback and deep discounting on marketplaces, fearing that they will slow down growth, especially in urban centres. “Cashback and deep discounting are the two biggest attractions for consumers shopping on ecommerce. With that likely to be compromised from February 1, growth will be impacted,” said Mayank Shah, category head of Parle Products, India’s second-largest biscuits maker.
“Even if companies like Amazon or BigBasket start offering alternatives to cashback — for example, movie ticket vouchers or flight booking discounts — it constrains consumers and doesn’t have the same draw as a flat cashback in consumers’ wallet.” Ecommerce contributes close to 2% of the country’s Rs 3.4-lakh crore fast-moving consumer goods business, up from 0.4% in 2016, and is almost entirely accounted for by urban markets.
The segment’s share is expected to widen to 11% by 2030, riding on a rapidly growing internet economy, according to market research firm Nielsen. “We do see some short-term risk of disruption, especially if sellers who are our immediate customers are impacted,” said Godrej Consumer Products business head-India (ecommerce) Robert Menzies.