The festive and wedding season has resulted in a strong growth in online sales for a range of products including consumer electronics, smartphones and apparels, amongst others. And, once again retailers highlight that this sales growth has been driven mainly by consumers in Tier-II and smaller towns across the country.
Striking a similar view, Ajit Joshi, MD & CEO, Infiniti Retail, which runs Croma, said, “We have grown aggressively online, in terms of ‘visitors’ to our site, and orders placed online.”
The country’s internet base which already exceeds 100 million, and is amongst the largest in the world, and it has led to several brick and mortar retailers launching their online operations.
Dipen Desai, Brand Manager, Hidesign highlighted that online retail has been a key driver for their overall sales. Desai also pointed out that they generate nearly 7 per cent of their sales online, in tune with the global retailers.
Striking a similar view, Pradeep Hirani, Chairman and Managing Director, Kimaya Fashions, said, “We have benefited from the consumer boom in smaller towns along with NRI making purchases from our site.”
Retailers have also taken steps to build synergies between their online operations as well as traditional brick and mortar stores. For instance, Croma which offers 3, 500 products on its site, has the ‘Order online, pick-up from store’ and it also enables optimum footfalls at its 95 stores across the country.
In addition, retailers highlight that the above strategy helps to overcome the inherent problems of a pure online strategy, namely lack of trust of consumers with e-retailers.
Roadblocks to growth
Online sales in the country are valued at several billion dollars each year, and account for less than one per cent of total retail sales in the country. In addition, analysts highlight that e-retailers need to take steps to ensure their operations are profitable, and strike an optimum balance between expanding their consumer base and discounts offered.
Karan Behal, CEO, Prettysecrets, a lingerie retailer, launched their online operations last year, and high sales growth has been driven mainly by promotional offers. Analysts remain divided on the viability of such a model over the long-term.
Clearly, the online retail industry in the country is showing signs of maturing, and also giving serious competition to existing brick and mortar stores.