The expert evaluated the discount system on marketplaces

The main beneficiary of discounts on marketplaces is the site itself, Alexey Molodykh, General Director of the International Association for the Development of Marketplaces and Entrepreneurs, told Izvestia. The external attractiveness of discount offers hides a complex mechanism, he explained.

"Discounts and promotions have long been an integral part of the operation of marketplaces. Buyers are happy with profitable offers, sellers receive additional traffic, and the sites themselves receive an increase in turnover and a new loyal audience," noted Molodykh.

The expert recalled that the survey data of the Association of e-Commerce Market Participants was recently published. It turned out that 98% of sellers support site discounts, and 99% oppose their restrictions, although some of them would like more flexibility in managing discounts.

Molodykh noted that sellers, as a result of imposing discounts, lose the ability to control pricing. "We have already recorded complaints from entrepreneurs that the price of goods has dropped to non-market prices due to promotions. This is not surprising, because discounts can reach 70% of the cost of the product," he stressed.

The head of the International Association for the Development of Marketplaces and Entrepreneurs pointed out that users of marketplaces and the industry "have yet to feel" the consequences that the sales market will face when marketplaces reduce the cost of investing in discounts.

"Everyone knows that monopolists, after ousting competitors, increase the cost of services and refuse shares. In the future, this may happen with marketplaces: as a result, the cost of goods may multiply in all sales channels," warned Molodykh.

He also stressed that marketplaces place discounts at their own expense on marketable goods that attract customers and increase sales, rather than on low-turnover goods that sell poorly and occupy warehouses.

"The very mechanism of discount provision by marketplaces is opaque and unclear, and the volume of discounts is unevenly distributed: large brands get the best conditions, and small businesses have to adjust," he added.

In addition, discounts on goods increase customer loyalty to the marketplace itself, rather than to the seller's brand, the expert believes. This is because customers do not remember the seller from whom they purchased the discounted product, they associate the availability of discounts with the site.

"There is a distortion of the buyer's price perception — he expects the same level of discounts in the seller's own sales channels as on the marketplace," said Molodykh. Not all sellers realize that the discounts were set by the marketplace, and it is difficult to afford to maintain such discounts on their own.

"As a result, the seller has to play with the price and try to equalize the prices of goods in different sales channels in order to maintain alternative sales platforms to the marketplace," the head of the association added.

Molodykh also reminded that the buyer purchases the product at a price that is already, as a rule, inflated due to the peculiarities of pricing on the marketplace and the seller's desire to equalize prices in different sales channels.

"The buyer sees the "promotion" and thinks he gets a benefit, but in fact he can pay the same as without the discount — just in another sales channel. Such a mechanism blurs the understanding of the real value of the product," the expert noted. According to him, the consumer is looking for the lowest price, but cannot be sure how objective it is.

The use of the marketplace should be balanced, the expert concluded. "Otherwise, in the long run, everyone loses: sellers lose margins, buyers lose adequate pricing, and the market loses healthy competition," concluded Molodykh.

He stressed that the search for a balanced discount solution and the attention of the regulator to this problem is the key to fair and competitive competition in the marketplace market, which as a result will lead to the development of the industry.