The furore over online sales, including Flipkart’s Big Billion Day sale, has triggered a new fight between online and offline retail models.
As customers are getting hooked to the convenience and discounts that online shopping offers, many have pronounced the end of brick and mortar stores.
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E-commerce has soared in India in the past three years. Though it accounts for just about one per cent of the total retail market in India, it has dented offline sales of electronics, books and music. While the impact on malls is still miniscule, individual retailers are calling for government intervention.
“There is no doubt that e-commerce is here to stay, but brick and mortar stores will not go away. The two will co-exist. While there might be a few ripples, it is not impacting the business so much,” Senior Vice President and Mall Head of DLF Promenade and DLF Emporio, Dinaz Madhukar said.
She added the impact is mainly in the electronics market where consumers know the brands and are getting good deals online. For fashion (apparels, accessories), however, offline remains the preferred medium. “Customers want touch and feel what they buy. Also, in India there are no standard sizes for clothing and shoes, which tilts the graph in favour of offline stores,” Ms Madhukar said.
Pacific Mall, Executive Director, Abhishek Bansal agrees, “A lot of hoopla is being created over online shopping. Sales in certain categories such as electronics and books may exceed offline sales, but fashion is a big no-no. People prefer brick and mortar stores for that.”
Ms. Madhukar pointed out, “When we go out, we move in families, we are not loners. So, in malls there is balance between entertainment and shopping. It is about giving an experience and not just about shopping and e-commerce can not touch that.”
However, retailers of electronic goods, particularly mobile phones, paint a dismal picture.
“Electronics, particularly the mobile phone segment, has been heavily impacted. Our sales have declined by 20-30 per cent. This Diwali has been a shocker, sales are down by 70 per cent…of this how much is because of the overall sentiments and how much due to ecommerce is hard to say,” Ashok Kashyup, who runs mobile phone store in Karol Bagh said.
Likewise, a dealer in Noida, said there is an impact of 15-20 per cent on sales due to online shopping. “When Flipkart’s Big Billion Day sale went online, we saw a massive drop in sales for the next 2-3 days.”
These retailers believe government should intervene to create a level playing field for their survival in the long-term.
Harprit Kohli, who runs Kay Dee Electronics that sell a range of products, including home appliances, washing machines, TV and air conditioners, said the impact for them is about 10-15 per cent.
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