THE ON­LINE RE­TAIL MENANCE

CRN - - COVER STORY - RAM­DAS S

While on­line re­tail ac­counts for only six per­cent of the con­sumer IT mar­ket, it is the preda­tory pric­ing prac­tices of e-tail­ers that is a cause of grave con­cern for

both, the IT com­pa­nies and the chan­nels. What can be done to stop this?

The rapid growth of on­line re­tail over the past few quar­ters has wor­ried the re­seller com­mu­nity in the coun­try. In the CRN On­line Re­tail Threat Per­cep­tion Sur­vey 2013, which polled nearly 370 re­tail­ers and re­sellers across the coun­try, 98 per­cent said that e-tail­ers have af­fected their mar­ket. About 28 per­cent said that their rev­enue has re­duced by 40 per­cent, while 37 per­cent said that they may quit the re­tail busi­ness if the trend continues.

While the ag­gres­sive pric­ing strate­gies of e-tail­ers is the big­gest rea­son for their growth, in­creas­ing cus­tomer con­fi­dence in buy­ing on­line is play­ing a ma­jor role in the growth of e-com­merce.

A study by the In­ter­net and Mo­bile As­so­ci­a­tion of In­dia projects the In­ter­net user base to grow from 150 mil­lion in 2012 to 400 mil­lion by 2015. On­line mar­ket­place eBay has five mil­lion reg­is­tered users across 4,396 towns in In­dia. Google In­dia es­ti­mates that over 22 mil­lion In­di­ans used the In­ter­net to trans­act last year.

“Shop­ping from your home with a PC or a mo­bile phone is not just has­sle-free but also of­fers you a wider choice. With al­most all e-tail­ers giv­ing the op­tion of cashon-de­liv­ery, cus­tomer con­fi­dence in buy­ing on­line has cer­tainly in­creased,” says Ki­ran Murthy, CEO, Getitbazaar. com, an on­line mar­ket­place.

At least two leading PC man­u­fac­tur­ers al­leged that dur­ing the fes­tive sea­son in 2013, Flip­kart sold more note­books than Croma, In­dia’s No 1 LFR which sells at over 93 large foot­print stores across the coun­try.

Ac­cord­ing to eMar­keter, the In­dian e-re­tail mar­ket crossed $2 bil­lion in 2012 and is ex­pected to clock $16 bil­lion in 2017. Elec­tron­ics, which in­cludes IT,

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