Published: 07 Sep 2021

To increase the traction and popularity of online shopping, one of the things done by players in the e-commerce industry is holding a thematic online shopping event. For example, exhibitions held to promote and showcase certain products, or thematic online shopping events. From a number of events that have been held, generally managed to attract many consumers to take advantage of this momentum. That's because of the many discounts offered. This is also what is now motivating many e-commerce players to create discount events, such as the national online shopping day program (harbolnas) on May 5 (5.5) 2021 in various e-commerce, 10.10, year-end discounts 12.12 and so on (dailysocial.id).

The question is, apart from creating hype, attracting attention, and increasing sales, do massive discounts have any other role? Will events like this continue?

Minister of Trade Muhammad Lutfi emphasized that the government will realize fair and profitable trade in Indonesia. One of them is by setting the "burn money" provisions on e-commerce services or online shopping sites. The government does not want discounts on e-commerce platforms to damage prices in the market, thereby making competition unhealthy and detrimental to businesses. Don't let discount sales become predatory pricing—which is prohibited in Law no. 5 of 1999 concerning Monopoly and Unfair Business Competition. The government will prohibit and strictly monitor unfair competition practices to ensure trade in Indonesia creates fairness and profit (liputan6.com).

Talking about predatory pricing, there is interesting information carried out by the Government of India. The government there fears such a platform will bankrupt small businesses. That's why India is considering banning flash sales (a momentary discount event). The government is concerned that this maneuver will have a major impact on India's online retail market, which is predicted to be worth US$200 billion (Rp2.85 quadrillion) by 2026 (id.techinasia.com).

The main function of this online discount event is to get new customers. In regions with low e-commerce penetration, such as in Southeast Asia, aggressive discounts will reduce potential customers' hesitation to try something new. A new customer is less likely to be disappointed if he/she purchases an item at a discount of up to 40% and the item is shipped free of charge.

Increased sales are only one part of the results of the discount event. However, this increase does not guarantee a healthier income. This is considering the large sales discounts and costs incurred to hold the event. Getting users into the habit of saving and waiting not to shop until the discount event arrives is one of the quickest ways to lose money.

Source: id.techinasia.com


In the end, it all comes down to offering a better online shopping experience than offline shopping. Whether it's by making payments smoother, maintaining product quality, preventing fraud, or having a strict return policy. With the increasing penetration of e-commerce, the urgency to hold such events will start to diminish. Even so the big discount event will not disappear completely. (Ruhmaya Nida Wathoni. Photo: Facebook, Discover The New Wave of Mega Sale Shoopers).