December 2, 2013
buying might be in vogue these days, thanks to a growing tribe
of youngsters shopping online. But there are old-schoolers, like
Srikant Bahal, who do not believe in virtual shopping.
The 36-year-old human resources manager at a private firm loves
his weekly rounds of malls. For Bahal, the touch-and-feel experience
is paramount while shopping. One cannot judge the quality
of a product by just seeing it. Even though I buy movie and airline
tickets online, when it comes to products, touching is believing
for me, he says.
However, when Titan started its online store this year, Bahal
gave it a try. He went to a nearby Titan store and shortlisted
some designs to gift his wife on her birthday. The designs were
available online, and he got a discount, too. Also, with the online
deal, he could avoid the hassle of shipping it to Tiruchirapalli
district in Tamil Nadu, where his wife stays.
Bahal has now made it a habit of checking out products at stores
and then clicking the buy button online.
Retailers in India are trying to catch customers through every
means possibleonline, offline, mobile and television. Multi-channel
retailing is the buzzword. And traditional brick-and-mortar players
such as Titan, Croma, Madura Retail, Fabindia and Vijay Sales
have jumped on the e-wagon.
The growth potential, no doubt, is huge. A recent study by Delhi-based
consultancy Technopak says the e-tail market is set to grow from
$0.6 billion in 2012 to $76 billion by 2021.
Another major advantage of e-tailing is the wide geographical
reach. Take, for example, electronics retailer Croma. Owned by
Tata Sons, it is physically present only in 16 cities, with 95
stores. But Croma's online store, just a year and a half old,
covers 298 cities and towns. Let customers decide which
medium they are comfortable with, and we will try to be present
there. Going online has opened India for us, says Ajit Joshi,
managing director and CEO, Infiniti Retail, which runs Croma stores.
Experts believe the trend will grow, courtesy real estate woes
and high labour costs. Also, in comparison, the capital required
to set up an e-tail venture is far less.
The biggest driving factor, however, is the increasing penetration
of broadband and availability of browsing devices, including smartphones
Alokedeep Singh, head of e-commerce, Titan Company, says sales
have gone up month-on-month, and doubled since it started. For
Croma, sales have gone up from Rs.30-40 lakh a week to about Rs.1
crore a week. Pizza chain Domino's, too, gives a thumbs-up after
its online launch.
The e-tailing market being already crowded with start-ups selling
everything from toys to homes, traditional players are targeting
customers who are particular about the touch-and-feel experience.
Like in Bahal's case, the customer can check out a product at
a store and then order it online. They can also choose unique
products which are not available at stores. Plus, the web sites
guide customers on products through videos and chats.
However, unlike a pure-play e-tailer, there will also be integration
issues for brick-and-mortar retailers moving online.
Physical retail requires the supply chain to handle
merchandise in bulk coming in from suppliers and smaller bulk
going out to stores. In the case of online retail, while the incoming
shipments are in bulk, the outbound consignments are to individual
consumers, who may also return the merchandise [if not satisfied],
says Devangshu Dutta, CEO, Third Eyesight, a retail consultancy.
This needs operating structures and organisational orientation,
flexible and varied enough to handle the wide range of merchandise
Experts say that multi-channel retailing as a concept has only
recently started gaining prominence across the globe. This has
been possible because of an advanced mobile app ecosystem and
smartphone penetration going up. India will need some time to
catch up, they say. Multi-channel retailing will be limited
by a lack of a supporting ecosystem, says Ankur Bisen of
Technopak. Right now, 3G access is limited to certain areas.
Broadband penetration has gone up, but quality of internet access
remains poor. Unless this sector improves, full-fledged multi-channel
retail will not be possible.
The global trend, however, is encouraging. Some of the top e-tailers
in the US, for instance, are brick-and-mortar players such as
Macy's, Walmart and Tesco.
* Online retailing or e-tailing in India is set to grow from
$0.6 billion in 2012 to $76 billion by 2021
* Traditional brick-and-mortar retailers account for 93 per
cent of the market, while corporatised brick-and-mortar retailers
have a share of nearly 7 per cent
* E-tailing is set to grow from the current 0.12 per cent
market share to 5.3 per cent by 2021, when there would be at least
180 million broadband users in the country
* The e-tail sector could create 1.45 million jobs in the
* The total volume of Indian e-commerce, including financial
and travel services, touched $10 billion in 2012
* Some of the top players are Flipkart, eBay India, Snapdeal,
Myntra, Amazon India and Jabong
(Edited version; sourced from The