India adds Black Friday to its shopping calendar  

Just when we thought that the holiday-shopping season was over this year, ‘Black Friday sale’ ads started replacing the Diwali deals on banners across retail windows in India. Phones and inboxes were flooded with notifications about deals from apparel and accessory stores, electronic retailers, and fast-food chains, last weekend.

It has left everyone thinking: When did Black Friday become a thing in India?

A big calendar event for retailers in the U.S. for almost three decades now, Black Friday falls on the day after Thanksgiving, which is celebrated on the fourth Thursday of November every year. For Indian shoppers, the discount is what matters. The history? Not so much.

While shopping websites got the ‘Black Friday Sale’ to India around five years ago, worth noting is the rise in number in offline retailers that jumped on the bandwagon this year. Experts attribute the rise to the intensifying battle between online and offline players for a larger share in India's $700 billion retail market.

Sale is a business imperative for retailers – it helps them clear old stocks and make way for a new inventory. But, over the past three to five years, while offline retailers have continued to organise peak sale days from time to time, offline retail majors have been conservative even as their inventory did not sell as fast as they would want.

“If you start giving discounts round the season, customers will consider you as a discounting brand. How do you get away from that? The best way to work around that is to say that there’s an event and that’s why we are giving discounts,” said Anurag Mathur, partner and retail expert, PricewaterhouseCoopers (PwC) India.

Creating events to attract discount-hungry customers goes back to 2006 when Kishore Biyani-led Future Group launched the Republic Day sale, which would one day become one of the biggest shopping events. Not just India, the phenomenon is global. Internet giant Alibaba’s Singles Day sales on November 11 is the busiest day for retailers in China and one of the largest shopping events globally.

This year, Black Friday coincided with Guru Nanak Jayanti (the birth anniversary of the first Sikh guru), which is a market holiday and retailers turned it into a shopping event. The number of offline stores that offered Black Friday sale this year was much higher than last year.

Beauty products retailer The Body Shop that launched the Black Friday Sale for the first time last year across six stores in Delhi and Mumbai last year, expanded it to 60 cities this year and even raised the discount rate.

Ashish Chowdhury, head of operations, The Body Shop India, says the company saw a tremendous response across India and the ticket size was about 15 times higher than normal shopping days.

"The basic idea behind this kind of activation is to attract new consumers to the stores with big discounts. The discounts are given on entry level products like fragrances and shower gels that our new consumers usually try," Chowdhury said.

Calling it the “only a mechanism to gain consumer attention”, Anil Talreja, partner at Deloitte India, said that the festive season period sale (starting with Onam and followed by Durga Puja, Dussehra, Diwali and Christmas) this year is going to set the new normal.

As the impact of demonetization and GST roll-out normalises, this year's festive sale numbers will set the precedence for the coming years, said Talreja. "The new normal is going to be better as the GST has brought into account a lot of sales which were not been recorded earlier," he added.

But, Abneesh Roy, senior vice-president (Research), Edelweiss Capital said that while shopping was higher than a normal day due to the discounts, the impact will be nowhere close to the Diwali sales. “Black Friday has picked up in the last three to four years in the e-commerce space and is increasingly visible in physical space. It is just one more effort to tap discretionary consumption. Impact will be seen more in electronic and durables," said Roy,

The rise in the number of online players has led to a discounting war in Indian retailing industry. “With investors  clearly defining targets and metrics for online players to make them profitability-driven, discounts have taken a backseat and the entire pressure on the offline channel has also abated quite a bit,” said Ankur Bisen, senior vice-president at management consulting firm Technopak Advisors.

From a consumer standpoint, it doesn’t help retailers establish any brand equity around the Black Friday sale unlike in the U.S., where the concept is clear to the consumers. Furthermore, the timing of the sale, just two weeks after Diwali – the shopping season that contributes to about 30-45% of annual sales for many online and offline companies – allows very few consumers to spend more on shopping, despite discounts.

Meanwhile, a lot of traditional retailers are trying to increase online presence, which is currently growing at 10% per annum. At the same time, online brands are trying to find space in brick-and-mortar stores. Globally too, retailers are trying to find solutions where they merge brick-and-mortar and e-commerce and go omni-channel.

“In a country like India, where shopping is still largely a social experience (enjoyed with family and friends), even if e-commerce builds up, there is room for brick-and-mortar retailers to grow," said Mathur.