PRICE WARS IN INDIAN E-TAILING:DELIGHTFUL DISCOUNTS AND DISSONANT

SUPPLIERS

This case study can be used to understand the pricing dynamics (and controversies) ofe-commerce/market place businesses in India. While P&G offers 13% margin on a pack ofPampers diapers, Amazon offering the same at 28% discount (of the listed price/MRP). Mostof the Indian online retailers offer huge discounts in their efforts to build the necessary scale andtraction for their respective site. But who would pay for the subsidized price? Amazon, whileoffers huge discounts to the end customers/buyers, reimburses the merchants for the pricedifferences (between the discounted price and the listed price). Many Indian online retailersoffer steep discounts, seemingly disturbing the apple cart. What would these steep price discountsmean for the Indian online retailers, the merchants/participating companies and the consumers?What accounts for substantial price differentials for a product – offline and online? Would theprice discounts tantamount to predatory prices and therefore come under the regulatory radar?

Pedagogical Objectives

• To understand the nature of marketplace businesses in India and analyze the businessdynamics of Indian e-tailers

• To analyze the pricing dynamics/pricing pressures of Indian e-tailers and analyze thesuppliers’/manufacturers’ challenges

• To discuss and debate on whether price discount strategies adopted by some of the Indiane-tailers can tantamount to predatory pricing approaches and understand the competitiveimplications of each predatory pricing approaches

• To examine the trigger points for price wars in Indian e-tailing and discuss on the possibleoptions for countering the price-wars

ABSTRACT

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