Alternate commerce the new retail reality?
Online biggies Amazon, Flipkart and Myntra all have a common thread and it's not their aggressive acquisitions. The etailers have turned to local stores for last leg deliveries and fast expansion.BY Shwetha Satyanarayan | Jul 03, 2018 | comments ( 0 ) |
Even with all the brouhaha, the e-commerce accounts for only about 2 per cent of the retail sector. But how are online players reaching the 67 per cent of the population that has no access to internet? From Amazon to Myntra, online retailers have turned to kirana stores for last leg deliveries, but how are brands reaching areas where there is no internet penetration? In today’s e-commerce era, alternate commerce is the new retail reality, writes ShwethaSatyanarayan
Online biggies Amazon, Flipkart and Myntra all have a common thread and it’s not their aggressive acquisitions. The etailers have turned to local stores for last leg deliveries and fast expansion. If Amazon has partnered with 17,500 neighbourhood stores in 225 cities (2017), Myntrahas joined hands with 6,200 stores in 50 cities, while Flipkart’s alternative delivery network, which includes Apollo pharmacy stores, handles 20-30% of its deliveries during its season sales.
However, how are these tech giants and big brands reaching customers without internet? With the emergence of e-commerce, brick-and-mortar players have changed their online strategies, but online players have found an alternate route to tap offline customers- the alternate commerce. If, for consumers in Metro cities, online shopping starts from mobile screens and ends at home delivery, for most in rural areas or beyond, where internet penetration is still low, a complete shopping experience mostly depends on last leg product availability. In a bid to reach more consumers, online retailers are taking the route to alternate commerce, a combination of omni-channel model and assisted commerce that acts as a key enabler to drive sales.
Understanding alternate commerce
So what is alternate commerce? A NASSCOM-KPMG report ‘IndiaTrends2018: Trends Shaping Digital India’ defines alternate commerce as, “In alternate commerce such as an assisted commerce, a consumer does not make a purchase on an online platform on his/her own. It is an integrated platform, alternate to traditional e-commerce, which brings together offline buyers, sellers and local merchants like kirana stores, mobile stores, pharmacies and other retail stores.”
Interestingly, alternate commerce is not new to the global arena, the report points out, and says that countries like Bangladesh and Indonesia have taken to alternate commerce in areas where the retailers could not capture rural market due to technical barriers. Now, with assisted commerce which is playing a key role, retailers have access to rural market.
In the report, Urban Ladder co-founder and CEO Ashish Goel, says, “Traditional retail followed the model of consumers coming to the brand. The retail reality of today is that we, as retailers, must go to customers. Omni-channel is the vehicle by which consumer-centric brands are able to engage and reach out to their audience more intimately and discover the right customer answers.”
How it works?
A brand will tie up with an assisted e-commerce organization to expand their reach, where the organization will provide local merchants with an app for offline customers to place an order. Further, a customer can walk up to the merchant’s shop, browse through the app and place an order for whatever product he/she likes. At last, the offline consumer will receive the product as per his convenient postal address.
The India Trends report predicts that alternate commerce has promising future ahead. “FMCG, fashion, mobile and electronic products will be the next wave of categories to choose assisted commerce as a channel to enhance their reach and gain further customer information. The rural consumer, who is going to be at the forefront of India’s retail growth story, can be brought to shop online through these platforms. It is an avenue for local merchants to be able to expand their portfolio to their customer and generate more sales,” the report suggests.
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