E-Commerce Wars: Retailers queue up against e-retailers

Major conglomerates such as Tata, Arvind, Mahindra, Reliance Retail and Aditya Birla Retail explore online fashion, to take online e-tailers head on and fight digital battles with each other outside the store.
E-Commerce Wars

It’s interesting how major conglomerates such as Tata, Arvind, Mahindra, Reliance Retail, Landmark Group and Aditya Birla Retail are foraying into online fashion, to take online e-tailers head on and to fight digital battles with each other outside the store.

With the news of Tata Group’s launch of online marketplace, CLiQ breaking the Internet today, the online fashion retail completes a full circle of online forays by several established conglomerates, including Aditya Birla Group’s abof.com, Reliance Industries’ Ajio and NNNow.com by Arvind Ltd. According to a Morgan Stanley report, rise in internet penetration, rise in the number of online shoppers, and an increase in per capita income has pegged the value of India’s eCommerce market from $102 Bn to $119 Bn by 2020.

In an exclusive interview with Indianretailer.com, Kumar Mangalam Birla, Chairman, Aditya Birla Group – the man Friday who hurtled forward his empire with élan and interests ranging from telecommunications, branded apparel, metals, mining, retail and financial services – revealed how Trendin.com, a site offering Omni-channel experience to the customer under the aegis of Madura and Pantaloons Brands was a miss with the millennial of India.

“This is something that we have been debating since the last few months,” he said. “For abof, our consumer set segment is different and so is the medium. What the millennial is looking from the merchandisers is very different from our current offerings of Louis Philippe, Allen Solly, Van Heusen and even Pantaloons,” he added.

The War for eRetail, will now start in Retail
Trendin.com was the brand’s first move to venture into Omni-channel retail, connecting brick-and-mortar, online and mobile apps. But the $41-billion-Group could not justify laying significant emphasis on growing its ecommerce portfolio via Trendin, because it was for “mature” generation.

It could not compete with the likes of Jabong and Myntra, e-tailers showing aggressive growth signs and known to acquire customers through deep discounting. Trendin reported a 1 per cent share of revenue garnered by Madura and Pantaloons brands one year after its launch, while Jabong reporting a jump of Rs 520 crore in the span of two years (from FY 2011/12-2013/14). The reason behind launching abof.com, apart from having a specific, fashion-oriented brand for youths, is to take discount e-tailers head on. To begin with, it will house 55 brands, including marquee brands like Jack & Jones and Being Human, in addition to its own private label, also called Abof.

“We will not be playing the discount game. We believe that a great brand, with a great product and customer experience can avoid getting into deep discounting mode. And that is the path we intend to walk down with abof.com,” revealed Prashant Gupta, President and CEO, Abof.com.

“We will be offering in-house as well as external brands through abof. As of now our courier partners have covered close to 5000 pin codes in more than 400 cities in the country. We have significantly addressed the fit-and-sizing problem by introducing a first-of-its-kind 3-D Trial Room, which is much better than anything available in India at this point of time,” he added.

There is a significant shift in the customer expectation today, thanks to eCommerce. Omni-channel, being touted as the need of the hour, has taken retail industry by storm, thus leading the market leaders – threatened by the growing penetration and influence of online retail – redesign their modulus operandi. Right from MAX Retail to Arvind, to Reliance, to Aditya Birla to Mahindra, everybody is seen upping their offerings through the online channel. Also in the midst of rolling out Omni-channel strategies are Shoppers Stop Ltd and Future Group (of Big Bazaar and Central), which will have online presence very soon.

Traditional brands taking digital routes
After extending its new brand ‘Jio’ to newer businesses, Reliance Industries’ extended the brand to fashion eCommerce business, AJIO.com. According to the report, Reliance is planning to adopt a dual ecommerce model similar to Flipkart, which operates an ecommerce marketplace along with fashion portal, Myntra. AJIO.com has lined up with brands from the US, Russia, Turkey, Singapore, and Australia, besides other countries. The brands may include Holster of Australia, Gizia of Turkey and MDS from Singapore. Reliance has already appointed Sanjay Mehra, a veteran of US firm, Wolverine World Wide, as the chief executive of its fashion and lifestyle ecommerce business.

Mehra didn't respond to an email seeking comment on Tuesday.

Mahindra is another corporate house that will tap the eCommerce boom, with M2ALL.com – a portal that sells Mahindra products.

Linking online and offline retail shopping experience, Arvind Internet launched NNNow.com, the brand’s initiative to move away from the discount-driven eCommerce market to a brand-led shopping journey. While this project intends to tap the growing digital influence of fashion shoppers in India, it is also the first big move by Kulin Lalbhai, the younger son of textile tycoon Sanjay Lalbhai, who looks forward to reshape Arvind's fashion empire.

As per Lalbhai Jr, Nnnow is not a dot-com, but an omni-channel engine which will try and bring together the online and offline worlds. “I know omni-channel is an oft-repeated term. It's confused with multi-channel sales. I need to be clear about what we are doing. This is simply Arvind's biggest wager in the last few decades,” he told a major daily in an exclusive.

When MAX Retail was conceptualised in 2005, the mid-market consumer segment was almost 40 per cent of the total market. Today, while the overall market is growing at 7-8 per cent year-on-year, MAX brand is recording growth in double digits, said Vasanth Kumar, Executive Director of Lifestyle International’s MAX Retail Division. The group’s also maximising its offering through online channel, lanmarkshops.in, which went live in January this year.

“If any particular product is not available at the store, we have the ability to service through our online portal. We are delivering items at the customer’s doorstep now, and the customer doesn’t see it as a favour. We have to do it,” explained Kumar.

The writing on the wall is clear. India is becoming a melting pot for online fashion portals. So, there is a fast developing ecosystem which is leveraging and enhancing the customer’s expectation and consequently increasing consumption.

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