By Ruma Dubey
Ask almost any new generation, yuppie person how he prefers to shop and pat comes the answer, “Online only!” And which site do they prefer? Most of them say, “Amazon of course!”
Todays’ news that famed toy shop, Toys R Us, in USA has filed for bankruptcy does not come as a shock. This is how things are in the USA right now – any shop you go to, be it apparel or technology, shops stock little of all that is available and what you get online is simply incomparable – in terms of price and choice. The ease with which one can shop – sitting at home or in office, with a mere click, within minutes, be it grocery or clothes or even consumer durables, everyone comes home.
India too is heading there, slowly but surely. Earlier days, internet connection and banking, security was the issues but today, they have been resolved and even rural India, through mobile apps is shopping online.
Everything that rules our lives today thrives on its online presence – like Bitcoin is the world’s biggest bank but with no actual cash; Uber is the world’s largest taxi company but owns no vehicles; Facebook is the most popular social network but does not creates no content; AirBnB is the world’s largest accommodation provider but owns no real estate while Alibaba, the most valuable retailer, holds no inventory or logistics, and does not sell anything itself, aside from space on its servers and advertising for its products. This is how complex the world has become for the traditional brick-and-mortar companies.
The small retailers have obviously accepted this completion but the fear that all will close down, even now stands incorrect but if Amazon, like in the USA, begins its own brick-and-mortar outlets, which offer groceries at much cheaper rates; that too could change. More than the smaller retailers, the bigger shopping malls with their huge fixed costs are shutting down, with many turning into office spaces. Several malls across the country have been converted into commercial or residential complexes because of poor business. In 2016, five malls shut while 10 others changed their usage to offices, educational institutes, shopping clusters, hospitals and banquet halls.
Tomorrow, the huge online sale for Diwali begins – there is Flipkart’s Big Billion Day and Amazon’s begins on 21st Sept and it is offering up to 70% off on home and kitchen items as well as on fashion products. PayTM too begins its sale from tomorrow. In fact Criteo, the commerce marketing leader has put out a report stating that based on analysis of about 4.8 million transactions, there has been an upsurge of 490% in average visitors, leading to an increase of average sales by 140%, on major e-commerce websites pre-Diwali last year. It has stated that Diwali is indeed the busiest season for shopping through mobile phones, wherein 79% shoppers use mobile phones for shopping at Diwali. Jewellery, luxury goods and apparel are the most sold products.
In today’s time, there is really nothing like brand loyalty –with the consumer spoilt for choice, anything which is priced right will go. E-tailing is still at a nascent stage in India as majority of the people still need the touch-and-feel factor before buying anything but this is changing. What a pleasure to order grocery online and avoid the traffic, queues, jostling and pushing and the trouble of lifting all the bags, if you can get the very same goods, delivered to your doorstep, that too at much cheaper rates? Today, the urban dwellers might be frequent users of e-tailers but surely it is going to catch up all over. CLSA has put out a report and it has stated that e-commerce presently accounts for less than 1% of the total retail market in India but is by far the fastest growing retail channel. It is estimated to grow to as much as $22 billion (excluding travel) in five years from $3.1 billion as of now.
The clash between online and offline will only intensify but both have to understand that neither of them can today survive without either of them. But the small mom-and-pop shops and bigger malls need to reinvent or else they will wither away into oblivion.