{"id":1442,"date":"2016-05-31T12:05:38","date_gmt":"2016-05-31T06:35:38","guid":{"rendered":"https:\/\/digital-banjara.com\/blog\/?p=1442"},"modified":"2016-05-31T12:05:38","modified_gmt":"2016-05-31T06:35:38","slug":"online-retail-india-boom-bust","status":"publish","type":"post","link":"https:\/\/digital-banjara.com\/blog\/online-retail-india-boom-bust\/","title":{"rendered":"Online retail in India. Boom or Bust?"},"content":{"rendered":"

What is ailing online retail in India?<\/h2>\n

It is everywhere!<\/span><\/p>\n

In offices. At coffee shops. At restaurants. At fast food joints. At family reunions. At school reunions. The buzz word… Startup!<\/span><\/p>\n

If one were to go by research reports, India is\u00a0ranked right up there, among the top, in the number of startups that have suddenly surfaced all around us.<\/span><\/p>\n

Gone are the days when conversation between friends was about cricket, sport, politics or one’s progress\u00a0in life relative to one’s friends.\u00a0<\/span><\/p>\n

Funding is now ‘the’\u00a0catch phrase. Everyone is talking about how\u00a0their ‘disruptive’ idea will redefine the way retailing,\u00a0as we know it, is run. About how the small and meek players shall be gobbled up and wiped off the face of the earth, while the large players will now need to reorganize and reinvent, in line with their ‘new’ mantra.<\/span><\/p>\n

So every day a new idea is born. A new company is registered. And a new set of investors are conned into putting money on an idea that can’t go wrong. In reality, most of the times it does.<\/span><\/p>\n

\"Online<\/a>

Online Retail in India – Boom or Bust?<\/p><\/div>\n

Not because the idea is wrong. But because in the excitement to rule the world, the entrepreneurs forget one basic thing. That apart from a few really pathbreaking technology based innovations, most\u00a0online retail businesses (including their own path breaking idea) are\u00a0just a traditional business, delivered over a new medium. They use technology, but don’t really leverage what it can do.<\/span><\/p>\n

For example, having a product\u00a0delivered to you wherever, whenever isn’t really new as a concept.\u00a0Even the Kirana store next door does that. The only difference is the\u00a0convenience of ordering on an app…\u00a0the\u00a0interface. And while you may speak for hours\u00a0about how the UI or the UX is what makes the experience ‘sexy’, the fact is that apart from the intuitive interface, promotion of laziness and the ‘below market price’ tag, there is nothing spectacularly different about the experience to make it a necessity. It is one more among many options that one has, to order products.<\/span><\/p>\n

A majority of Indians still like to touch, feel, choose their products and bargain hard with the shopkeeper, before making a purchase. Something an online ordering facility can’t offer you (which would probably explain the high return rates that most online retailers in India suffer from).\u00a0<\/span><\/p>\n

Additionally,\u00a0the fact that many businesses are surviving on funding, providing discounted \/ subsidized services to drive registration, trial and purchase, means that the numbers (on paper) look awesome and extremely promising, without actually being a reflection of reality.<\/span><\/p>\n

Somewhere down the line, companies will have to stop subsidizing the products they sell\u00a0and actually start driving revenues and profits. Even the most patient investor will someday hold the entrepreneur responsible for ROI.<\/span><\/p>\n

What would happen then? Will the companies fold up? Will this euphoria last?\u00a0<\/span><\/p>\n

Depends.\u00a0<\/span><\/p>\n

The challenge most online shopping in India faces today, is the same challenge faced by Kellogg’s when they launched their corn flakes for the Indian consumer. Indians were not used to having corn flakes for breakfast. So, even though they tried Kellogg’s, they eventually drifted back to traditional breakfast foods. It has taken a long time and a lot of effort for Kellogg’s to be accepted and they managed that, not by pricing themselves cheaper than a Parantha, but by understanding Indian eating habits and building a connect with it.\u00a0<\/span><\/p>\n

Likewise, online retail in India faces a big challenge. A majority of\u00a0Indians are not\u00a0comfortable\u00a0making purchases online. Many factors, including a fear of technology, distrust towards credit cards and online monetary transactions in general and the wariness of dealing with a faceless customer care division, ensure that this is not going to change\u00a0in a hurry either. The Cash On Delivery experiment is a very expensive affair for the retailer, as the consumer has no obligation to\u00a0accept the product (or bear the cost incurred in delivering it and then returning it to the seller). Reducing prices can only drive trial or a spike in short term sales. It cannot ensure loyalty.<\/span><\/p>\n

The challenge is not about adoption.\u00a0In a country which has been the cornerstone for\u00a0the invention of ‘Cash on Delivery’, insane sales and lowest price guarantees, driving trial is not an issue.\u00a0<\/span><\/p>\n

The challenge is retaining consumers while charging them profitable market prices.<\/span><\/p>\n

The challenge is about changing consumers’ purchasing habits.\u00a0And\u00a0that is where the battle will be fought.<\/i><\/span><\/p>\n

photo credit: add-custom-options-for-your-users-680×300<\/span><\/a> via photopin<\/span><\/a> (license)<\/span><\/a>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

What is ailing online retail in India? It is everywhere! In offices. At coffee shops. At restaurants. At fast food […]<\/p>\n","protected":false},"author":1,"featured_media":1443,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[200],"tags":[341,342,343,339,340],"class_list":["post-1442","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-industry","tag-boom","tag-bust","tag-investment","tag-online","tag-retail"],"jetpack_publicize_connections":[],"yoast_head":"\nOnline retail in India. 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