Tug of War: Retailers Vs Ecommerce Service Providers

Top retailers who are also member of the Indian Retail Association of India are up in the arms against their digital counterpart as they are not able to match the competitive pricing of the etailers such as Amazon, Flipkart, Snapdeals and the like.

Why this hue and cry? Is the anger justified? I don’t think so. E-tailing is a game changer as industry players are giving traditional retailers a run for their money. Most ecommerce companies save on the warehouse (inventory cost) and operations cost and pass on the benefits to consumers. In comparison big retailers incur substantial operations cost and pass these on to the consumers.

The adage “If you can’t beat them, join them” holds good even today. Instead of knocking the doors of North Block Mandarins and lobbying for policy change, the big retailers should read the market (consumer) sentiments and expand their reach by taping online customers through ecommerce. Such a move will not only benefit big players but also improve the level of competition in the ecommerce industry.

Taking cue from the market some of the big retailers such as Future Group, Aditya Birla among others are either tieing up with existing etailers or planning to provide digital shopping experience to customers. Others should follow suit.

Numbers say it all! The e-commerce sector, pegged at about $4 billion, is expected to grow to $15 billion in two years. Brick-and-mortar stores account for the bulk of India's $600-billion retail market, the majority of which is unorganised. The e-commerce sector's share remains only three-four per cent. This year, investments in this sector has risen to Rs 20,000 crore, four times the amount last year.

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