E-retail constitutes less than one per cent of the annual $ 500 billion sales of the broader retail sector, but with rapid expansion of sales, especially in smaller towns, VCs and private equity players remain bullish on this distribution channel. And, this has view has been reinforced with the recent round of funding received by leading e-retailers including Myntra and Jabong.
Financial investors also highlight that in several categories including the key fashion segment, e-retailers are slowing becoming profitable. “Selling fashion online is starting to become profitable, especially for private labels,” Prashanth Prakash, Partner, Accel Partners, said at the sidelines of the Internet Retail Expo.
Similarly, Anchal Jain, Managing Partner, IndEU Capital, opined that consumers in tier-II and-III towns are increasingly purchasing online, given the absence of modern trade in these regions.
However, the emphasis of a viable business model to serve these customers is also viewed as key.