THE ONLINE RETAIL MENANCE
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,