Google Closes GOSF, but Online Deals Aren't Going Away

On Wednesday, Google India announced that it would be shuttering its Great Online Shopping Festival program, which started in 2012 and had a three year run.

The yearly sale had novelty value when it started out, and impressive statistics to show in terms of traffic, with the 2014 edition getting 80 lakh visits during the three day festival. Last year's GOSF saw participation from 400 partners, along with the launch of the Chromecast and Nexus 6. Notably, the festival managed to sell a fair number of homes, cars, and bikes. Regardless of its success, it's very pragmatic of Google India to bring it to a close, as people were already calling it lukewarm last year.

The e-commerce landscape has changed significantly over the last year - most of the large e-commerce firms have their own apps that they would rather promote, and sale-based campaigns have been under way for a month. We've already had the Amazon Diwali Sale, the Snapdeal Diwali Sale, and Flipkart's Big Billion Days Sale. Another sale at this point would just elicit groans of tedium and fatigue at this point from a jaded online community of shoppers who aren't impressed anymore with 'fake' discounts.

(Also Read: Snapdeal Diwali Sale: Exaggerated Discounts Dampen the Spirit of Electronics Monday)

Most e-commerce firms also offer year-round sales, and tech brands have gone to town with the flash sale model, as brands like Xiaomi, Yu, One Plus are all putting up their inventory exclusively online.

As Google India says in its blog post: "Users don't have to wait for 12 months to get the best deals online, small and medium businesses no longer have to wait for www.gosf.in to find customers from all across India."

That's a pretty honest assessment of the e-commerce market in 2015, and as Google India notes, pretty much everyone who is on the Internet in India has had an online shopping experience, and it's already a $10 billion industry. This particular use-case no longer needs validation from a tech giant to lend it credibility. According to the latest Gartner's estimates, India's digital commerce market has a transaction volume of around $7 billion (roughly Rs. 45,841 crores), and is growing at 40 percent every year.

What all this deep discounting model has brought into question is whether it can buy consumer loyalty - or be considered innovation. The average Indian online consumer is savvy enough to know a good deal when he sees one, and has no reason to stay loyal to a particular e-commerce platform. Meanwhile, an ecosystem of deal aggregators and comparison engines are making hay while the sun shines, feeding off the VC largesse. What this means is that the online deals and sales that have become a way of life for e-commerce platforms aren't going anywhere for now - so pulling the plug on the GOSF was a smart decision.

(Also Read: The Problem With Online Festive Sales)

Online sales are not likely to go away - the likes of Amazon and Flipkart will always be more competitive than offline stores as they don't have to spend money on commercial real estate, and given their economies of scale. But the giant deals we've been seeing are going to slowly dry out. On the other hand, newer e-commerce companies that use up their funding to subsidise consumer purchases, in order to drive growth really aren't doing themselves a favour. Deals will remain, but don't expect them to be steals, if the company plans to last.