Close to 77 per cent of customers browse in stores before making a purchase online and 55 per cent of them conduct online research before making a purchase in-store, Tony Navin, senior vice-president (partnerships and strategic initiatives) at Snapdeal, tells the writer, pointing to the emerging hybrid retail space in the country.
How has the emergence of e-commerce changed the retail industry in India?
E-commerce has taken the world of retail by storm and, in the recent years, we have seen a remarkable transformation in the way India shops and trades. People all over the country are now able to shop in a hassle-free manner for brands and products they had little access to earlier. The Indian e-commerce industry is likely to cross the $100-billion mark over the next five years, from $17 billion at present.
The growth is rapid as sellers get unprecedented market access on the one hand and buyers get access to an unlimited assortment of products on the other. Online commerce is significantly adding efficiency and new growth avenues to the retail industry, supported by a robust supply chain and good logistics and infrastructure facilities.
How has online retail impacted the offline retailers? While there are some, such as those selling electronics, who are finding it tough to keep up, many brands are now formulating special online strategies.
Increasingly, both online and offline retailers are realising that this is not an either/or question. About 77 per cent of customers browse in stores before making a purchase online and 55 per cent of them conduct online research before making a purchase in-store. Both the retail models have their own strengths. While online retail allows customers to shop while sitting in the comforts of their homes, the offline mode allows them to touch, feel and experience the products before making the purchase. There is a need to merge the two models and both offline and online retailers are increasingly realising this.
We recently launched an omni-channel platform which integrates offline and online retail channels to provide a seamless and differentiated shopping experience. It allows customers to access value-added services as part of their purchase.
Can you give us an idea of how big the retail industry is in India, and the split between offline and online? Going forward, how do you see this split changing going forward?
E-commerce is growing at a frantic pace. However, despite the high-decibel growth, it only makes up for a single digit percentage of the $500 billion Indian retail industry at present. This scenario, however, is going to change over the next five years as 3G/4G Internet penetration increases, led by smartphones and the government’s digital India initiatives. We foresee a China-like rapid growth trajectory for e-commerce in India.
Are there categories of products that people still prefer buying offline?
As consumers develop more confidence transacting online, we are witnessing, an increased comfort levels in buying products across categories. Products like cars and houses, earlier thought impossible to be sold online, are doing very well now. As omni-channel models evolve, the gap will only get bridged further.
Would you say the attraction of online shopping is still in the discounts that e-retailers offer?
No, of course not. The growth of e-commerce industry in India is being driven by a greater number of choices available and greater convenience experienced by customers. This, coupled with an increased enthusiasm amongst small and medium enterprises across India for expanding their business by tapping new markets, is contributing to the current boom in e-commerce. The value proposition from marketplaces like ours for both buyers and sellers is unmatched.
