Brick-and-mortar retail traders have seen a drastic fall in festive season sales due to a variety of reasons, the primary among which are the deep discounts e-commerce platforms are offering, according to the Confederation of All India Traders (CAIT).
According to CAIT, the slowdown in sales is clear in the run up to Diwali, as well as on the auspicious festival of Dhanteras (October 25).
“The slowdown in commercial markets of the country continues even on the day of Dhanteras, which is considered as the most auspicious day to buy gold or silver jewellery, utensils and kitchenware, and appliances and electronics,” CAIT said in a statement.
It added that if this trend continued, physical retail traders could see sales fall by as much as 50-60% by Diwali. The traders’ body, which represents seven crore traders across the country, said the main reasons for lower sales are the discounts run by e-commerce companies, a cash crunch in the markets, lower spending capacity of consumers, and piling up of unsold stock. However, the main culprit, it said, was the shift consumers were making to shopping online.
“The main reason for such a disappointing scenario is due to highly surging sales in e-commerce market which is offering huge discounts on various products and even indulging in predatory pricing and adopting unfair business practices, which have greatly attracted customers to online markets,” the statement said.
“Recently, in the festival sale put up by Amazon and Flipkart, both companies sold goods worth about ₹19,000 crore in just four days; it is clear that a large part of the business of brick and mortar shops have already shifted online.”
According to CAIT secretary general Praveen Khandelwal, retail traders have seen a 60% decline in sales of mobile phones, a 35% fall in FMCG and consumer durables, 35% in electronics, 25% in apparels, 20% in footwear, 30% each in kitchen equipment and toys.
