Companies

No time to shop? Online retail, direct selling come to rescue

Rashmi Pratap Purvita Chatterjee Mumbai | Updated on November 12, 2019 Published on September 19, 2013

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That urban Indians can’t spare much time for leisure is well-known. Now, they don’t have enough time to shop either. According to a study, an average urban Indian spends just six days in a year on shopping. At other times, it is alternate retail that swoops in to help.

Alternate retail includes not only the time-tested electronic commerce (ordering online) but also home shopping on TV and direct selling agents who deliver goods at home or workplace. Alternate retail is already a $2.2 billion industry in India, thanks to increasing work pressure, need for work-life balance and challenges of transportation in big cities.

Revenue growth

While both direct selling and e-tailing are clocking in over a billion dollar in revenues annually in India, home shopping on TV has become a $200-million market, growing at a CAGR of 20 per cent in the last three years, according to the study by consultancy firm Technopak.

Over 50 per cent of those shopping through TV are from the metros while tier 2 and tier 3 cities bring in 60 per cent of the revenues for e-tailing industry.

The growth in alternate retail channels is being driven by two factors – convenience and reach. Urban consumers have increasingly become time-poor. This is leading to a conflict between consumer’s desire and his ability to shop.

“Home shopping offers value as well as convenience. Most of the traffic is from the metros and mini metros,” said Sundeep Malhotra, CEO, Homeshop18, pointing out that the business has been almost doubling annually. Nearly 40 per cent of the orders on home shopping networks are placed between 11 p.m. and 6 a.m., when people are back home from work or are working in night shifts.

Star CJ Alive, another home shopping player, has Delhi and the National Capital Region as its biggest market, followed by Mumbai. “Hyderabad and Bangalore are the fastest-growing,” said its CEO Kenny Shin. The company is clocking nearly 50 per cent sales growth every year.

More choice

Deepa Thomas, e-commerce evangelist at eBay, said, apart from convenience, it is also the access to a vast selection of products that makes consumers opt for e-tailing. “A lot of products, which are not available at brick-and-mortar stores, can be purchased online, saving time and effort required in checking various retail outlets,” she added.

For direct selling, it is the free demonstration of products and personal touch in sales that has helped growth. And south India is the biggest market for this industry. “Growth has come mainly from the southern markets. Places such as Bangalore, with its IT entrepreneurs, have led to the growth of this industry,” said Yoginder Singh, Senior V-P, Legal and Corporate Affairs, Amway India.

Ditto for Tupperware. “In the south, consumers are not price sensitive and are more quality conscious and willing to upgrade,” said Asha Gupta, Managing Director, Tupperware India. The company plans to add a new category of nutraceuticals to its India portfolio given the increasing demand from customers.

Technopak says the trend towards alternate retail will continue to grow in the coming decade. “Brands and retailers will need to look at alternate retail channels as an integral driver of growth in the coming decade,” the report added.

>rashmi.p@thehindu.co.in

> purvita@thehindu.co.in

Published on September 19, 2013
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