Exclusive | Etailing: Your next shopping destination.

The Mall culture has been in the country for about a decade now. While this culture still continues to exist, though in a diminishing manner, the consumer for the last three to four years has slowly been shifting to ecommerce. This option gives the consumer ease of access and also lets him choose the best that is offered. With brands having their own websites and apps to shop from, the consumers now prefer to first window shop and then carefully shop for their respective items. Seeing this trend Spire Research & Consulting has launched their research on India being a huge market for etailing.

Adgully caught up with Japnit Singh, Sr. Director, Singapore and India of Spire Research & Consulting to know the nitty-gritty’s of their research.

While the research mentions about apparels, food and consumer electronics being accepted by the consumers, it doesn’t mention footwear at all. Commenting on the same Singh said, “So far the footwear section has shown a positive trend in the e-tailing industry. Growth in the industry will be driven by women-centric categories like fashion, apparel and footwear. This signifies that there are immense opportunities for increasing trend of online footwear retailers which is due to the rise of e-commerce and the growing trend of online shopping.”

There are always positives and negatives about everything in this world. Speaking about overcoming the negatives in the etailing industry, Japnit says that, “The negatives like payment mechanisms can be overcome by building trust among the consumers by launching awareness campaigns. Other alternatives like 50% payment on order and 50% payment on delivery can be employed. In this case, both the buyers and sellers have equal stakes in the risk involved. Most consumers avoid online payments due to a multitude of reasons. So in order to avoid that, India needs to develop improved internet facilities. Other options like mobile payments or e-wallets or 3rd party payment companies can be used to overcome payment challenges. Nevertheless cash on delivery may continue to dominate the market, and retailers may have to find ways to mitigate customer risk. Such a model has worked well in some parts of the world such as Thailand.”

This market is very huge and needs a lot back end activities and logistics in place. With websites like Flipkart failing to fulfil their customers on a special Sale day, it has become difficult for the customers to shop from the same place again. Japnit has a different opinion on this, he says, “Flipkart’s Big Billion Day created widespread unrest among both consumers and local retailers. The retailers shunned this move calling it monopolistic and alleging Flipkart for attempting to control the market. It is said that these e-commerce giants sell products way below manufacturing prices primarily due to huge foreign funding.  Thus, this puts the local retailers at a disadvantage. As for the consumers, even though Flipkart couldn’t manage the overwhelming response online it still managed to pull off a sale of INR600 crores. Other players also faced the same problem. The key challenge lies in anticipating the surge of consumers on such sale days and allocating the adequate infrastructure. Also, the logistics and inventory play a major role.  We believe in future these websites will be in much better position to handle high traffic and consumer demand. And will continue to enjoy customers’ patronage despite the difficulties.”

In recent news the founders of SnapDeal invested in their own venture. “Investment and inflow of cash are an important part of this business. When a company invests in itself it brings out the confidence of the organization and aids getting more investors. This is a justified move as this would be the time to sow seeds rather than harvest,” added Japnit.

While we see more investor confidence, it is also important for this industry to tap a larger market. Obviously, e-tailers are yet to tap into potential consumers in villages and small towns. Japnit adds, “This can be done by increasing internet penetration. Mobile phones may play a large role in leap frogging PCs to support this growth. Moreover, proper transport infrastructure and logistics must be enhanced to reach remote areas. Services of India Post also promise unparalleled rural reach for delivery services to e-commerce players which has 1,55,000 lakhs post offices out of which 1,39,000 lakhs are in rural areas.”

Well in the end, there is a long way for the etailing industry to grow in this country. Speaking about his experience, Japnit says that, “My experience at India Property Research involved conducting a lot of first hand data gathering with potential investors and entrants into India.  I found this to be quite formative as it gave me a keen insight on the pulse of the India economy and business outlook, especially from the FDI perspective. And this experience was a stepping stone to the market research and consulting industry which has helped to shape the analytical tools that I have developed along with the team at Spire.” By: Archit Ambekar | Twitter: @aambarchit