Traditional retailers grappling with e-commerce impact

It has been a long time since Karthick Sankar, an IT employee, went to a brick and mortar store for shopping. With the presence of online retailers for nearly everything, from groceries to appliances, he sees no need to go out and shop.

“The prices are cheaper than in a physical store and it is possible to get products delivered the same day, which are the biggest differentiators for me,” he says.

Like Sankar, majority of the people are attracted to e-tailers for the steep discounts, flexible delivery options and product ranges on offer.

According to a recent survey done by PricewaterhouseCoopers, almost half of the shoppers buy online because of better deals and discounts. Apart from the price cuts during festival season online players carryout off-season sales, which has changed the customer shopping pattern.

The rising preference for online shopping is evident from the growth of online retailers like Amazon.in. According to Amazon.in spokesperson, in 2015 the company registered the highest spending season in India and also became the most visited e-commerce site in the country, as per the rating given by Comscore, an American internet analytics company.

With only two years and nine months of operations in the country, the company has emerged as the largest store, with over 40 million products.

Few of the major electronic retailers Business Line spoke to have witnessed at least 20 per cent drop in their sales because of online medium.

A store manager of one such outlet said, “Usually we do bulk of our business during festivals but the sales in 2015 has been very low.” Most of the people come to the store to get the feel of the product and buy them online.

Kumar Rajagopalan, Chief Executive Officer, Retailers Association of India, said retailers are unable to match the deep discounts provided by the global players, who are funded.

While most of the companies have their own website, some have tied up with leading online retailers to keep up with the changing trend. One such outlet is Chennai-based retailers Viveks, who has tied up with Amazon.in.

G Viswanathan, Senior General Manager – Special Assignments, Viveks, said that competing with the e-commerce players is one of the major challenges for the traditional retailers. “In the coming years, this competition is likely to multiply,” he said.

Despite the competition, Viveks is growing at the rate of 16 per cent as opposed to 14 per cent in 2014-15. Viswanathan attributes the growth to increasing online presence as well as better strategy in acquiring consumers.

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