With rising consumer confidence in buying products and services online, e-Commerce has risen rapidly in India - from Rs 8,000 crore in 2007, it is closing in on the Rs 50,000-crore mark. For traditional retailers, creating an online retailing model (e-tailing) is inevitable in the current environment, observed speakers at the India Retail Forum 2011 in Mumbai on Thursday.
“We are seeing multi-channel consumption, driving towards ‘omni-channel commerce'. While the brand experience is not limited to one channel, consumers are also purchasing across channels,” observed Mr Anubhav Kushwaha, Director - Business Strategy and Alliances, Reasoning Global eApplications.
He added, “In our experience, three out of five retailers are looking at online commerce to boost business. We also see a healthy number of consumers looking for offline retail brands online.”
Even as retailers take to e-retailing, they will have to draw from their core strengths as retailers, underlined Mr Daniel Rebhorn, Managing Partner, Embitel Technologies. He said, “Retailers need to think about their advantage of local presence. Connecting the advantages of online to offline and back end will be big opportunities for those in the brick and mortar retail business.”
Mr Kashyap Deorah, President, FutureBazaar.com, pointed out that with increasing population and consumption, e-tailing was inevitable. He said, “In India, we cannot cater to the growing consumer class unless we go digital, given the cost and logistical challenges of physical presence and the size of our country.”
For premium ‘large box' format chain Shoppers Stop, access and convenience could be factors driving consumers to other stores - one of the factors driving its e-tailing.
Mr Vivek Mathur, Customer Care Associate and Vice-President - Corporate Planning and e-Commerce, explained, “Physical footprint in tier-II and tier-III cities could be time consuming and not always feasible. Also, our e-Commerce also caters to the gifting and NRI segments.”
Payment Gateways
Challenges include issues with payment gateways, underlined speakers. For e-Commerce portal Snap Deal - which now has a presence in 25 cities and intends to ramp up to 100 by December - that is the biggest issue, explained Mr Tony Navin, Vice-President - Business Development.
“Ninety per cent of people visiting a site walk away without transacting, and another five per cent are unable to transact because of payment gateway issues. If we were to get into another business, it'd be the payment gateway business,” he added.
FashionandYou, the online ‘shopping club' which boasts of two million members in two years of operations, is witnessing high growth in users beyond the large cities. Mr Rahul Narvekar, Co-founder and Director, said, “We were surprised by the response from smaller cities initially. We had a lady buying two units of a watch priced at Rs 3.8 lakh each from Hubli - and she wanted Cash on Delivery.”