Local retailers go online to fight for a piece of sales pie!

By | November 4, 2014

Online store

With online retailers like Amazon, Flipkart and Snapdeal making all the news, local retailers are worried about of losing customers and gradually deteriorating figures. The fall out between local retailers and online e-commerce websites which had been brewing for a long time eventually came to a showdown after local retailers officially complained to the government about the recent ‘Big Billion Day Sale’ conducted by Flipkart. Local retailers have blamed e-commerce portals of undercutting prices to destroy competition backed by influx of huge foreign funding. Not only did the Confederation of All India Traders (CAIT) urge the government to take action against Flipkart, legal actions are also being planned against the e-commerce portal and others following the same route.

Online portals have been attracting more and more buyers from even smaller centers and towns, which is a matter of concern for retailers operating from brick and mortar stores. The low priced products available on online stores act as an incentive for the buyer apart from the convenience of shopping from home. The rules of the game are getting ready for yet another change as local retailers are joining hands to venture into the online segment in an attempt to fight against e-tailers. As it remains to be seen how the local retailers match up with the highly popular online portals, the Indian retail segment is gearing up for interesting times ahead.

Retailers joining hands to offer online sales: 

United we stand , divided we fall seems to be the mantra of small time shopkeepers across various segments like electronics, apparels and even food and grocery stores. Small shopkeepers and stores are joining hands to come up with a dedicated single online platform allowing them to sell their wares collectively using the online medium. A number of shop in the traditional string markets of old Delhi for example have already been running a community online portal allowing each shopkeeper the level playing field to sell their products online. Local retailers feel that this can be a sustainable business model in the long term as together they can compete with the might of the big online retailers in both supply chain as well as in technical expertise to handle the day to day operations of online retail.

Apparel retailers focusing on self run online stores: Local apparel retail companies who have been given a run for their money by online portals are now willing to focus their energy by selling their products directly to customers. Many apparel retail companies including the well established brands like Arvind Limited, TT Limited and Shoppers Stop are refining their independent online portals urging users to buy from them directly instead of buying from third party ventures like Snapdeal, Myntra and their likes. The pricing of products of these online stores are consistent with their brick and mortar stores and more over they are looking at innovative ideas to offer customers incentive t shop from their online stores.

Grocery retailers jumping into the E-commerce Bandwagon: If the online retail success story was built around Flipkart, Amazon and the likes selling multiple products of various segments, the next big boom is likely to be witnessed in the online grocery stores segment. From small grocery stores to medium sized companies and grocery bigwigs like Reliance Fresh and Future Retail are all eyeing the online grocery store market. E-grocery continues to be an attractive proposition as out of the country’s total retail spending of $525 billion a year; almost 66 per cent is on groceries alone. Current market players in the grocery segment including e-grocers, Local Banya, Ekstop and Big Basket are expanding while new entrants are entering the market paving way from physical retailing to online retail.

Price match websites to be major players: With so much influx being planned for the online retail market, websites offering price comparison for the products across various online stores are going to witness an unprecedented growth. With Amazon backed Junglee.com already having established its lead in the price match website section, other retailers are trying to work around a similar business model allowing them to offer their products to customers who can search them using such price comparison websites.

Impact on the common buyer:  An increase in the number of players is good news for the end users. The common buyer was in a dilemma as online sales offered products at a cheaper price but the user had to run around for warranty, service and RMAs. Now with brick and mortar retailers venturing into the online markets collectively, users can hope to find products online which would offer warranty and peace of mind.  Local retailers can get orders dispatched the same day in the city of their location cutting down the overall shipping costs and time making them have a big advantage compared to existing online portals that take anywhere between a week to ten days for delivery of majority of products.

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