Why online retailers are deciphering towards the hybrid model?

There has been a constant combat between the inventory-led and the marketplace business models and now it seems like the market is gradually drifting towards the later.
Hybrid Retailing

Gone are the days when pure-play retailing used to be the mother of all retail formats. The advent of e-commerce in the country has made retailing more of a dynamic process altogether. No doubt, e-commerce format has made shopping an extremely pleasant and seamless experience but, at the same time these solution providers are struggling big time in terms of stocking up behind their marketplace gateways. There has been a constant combat between the inventory-led and the marketplace business models and now it seems like the market is gradually drifting towards the later. The marketplace model also known as the hybrid marketplace model is surely disrupting the traditional retail mechanism both for brick-and-mortar and online retailers.

Many online retailers are of the opinion that the future of Indian retail lies in the hybrid marketplace-led model where both sellers and merchants can sell their products simultaneously. In the recent past many online retailers have stepped ahead and adopted this retail model to lure more and more costumers. The space has also seen a splurge of start-ups devoted towards the hybrid marketplace-led models and some of have indeed created a niche in almost no time. Amongst the few is ‘AaramShop’, a startup aimed at revolutionising grocery buying in India by providing the customers with features like mobile app for making their shopping list, explore and redeem deals/ offers available at their trusted neighbourhood stores, order household items online, get them delivered within hours and many others. Commenting on the same, Vijay Singh, the CEO & MD of AaramShop, said, “every household has their preferred neighborhood store. We want to ensure that the shopper can carry her preferred store within her mobile at all times.”

The FMCG sector has immense capability in the coming future and will surely reshape the retail environment. Joining hands with such online grocery aggregators, kirana stores in India is expected to add upto 90 % of FMCG sales and the dominance is likely to continue for the foreseeable future. This is because it provides a scope of reinforcing the brands and testing the market with minimal risk. Many online retailers have set up offline touch points or have plans for the same in their pipelines. Taking the trend forward, other sectors of retail and e-retail have also started shifting gears into the hybrid mode. Furniture and home products e-commerce marketplace, Pepperfry has too jumped into setting up their offline retail stores in various malls lately. “We are looking at setting up these offline stores near upscale residential areas, where the rentals are comparatively lower than high-street locations. Thus, for Pepperfry these will act as a sustainable model to drive traffic to the website and eventually translate into online sales,” says Ashish Shah, COO, Pepperfry.

Not just startups but even the big boys of e-retail such as Flipkart and Snapdeal have gone ahead in order to set up their offline stores in various cities. Apart from gaining massive consumer base, offline stores also help to build a brand’s credibility. As per a report by Technopak published in 2014, a mere 0.2 percent of overall Indian retail market was online in the year 2012 and is expected to grow upto 5 percent by the end of 2012. Thus, in India, this hybrid marketplace model is more diligent because of the larger number of point-of-purchases and resuming consumerism in brick-and-mortar space. Though, this models shows huge growth potential as every of the retail segments are maturing with the help of digital stroke but, still it has to go through various barricades including timeliness, packaging, quick reversals etc. These companies would need a teeming compliance with their merchants to provide a seamless delivery experience every time.

Publish Date
Not Sponsored
Live: People Reading Now