Motorola crack opened the e-commerce channel through a new product launch and now it is the turn of Xiomi flirting with Bansals of FlipKart. As followers mimic the first-movers, announcements of Amazon-Oppo, SnapDeal-Jolla followed the suite to try their luck. So, what is cooking here?
Disruption is order of the day to formulate new business models and thus consumer durable brands of alien land are exploring new channels of distribution to change the game. On other hand e-tailers are competing with brick-and-mortar counterparts to unlock the sweet spot in order to make that extra buck.
This is the cusp where new trends in Indian retail are unfolding and is an aisle to discover the rationale behind those unusual weddings. This article is a naive attempt to decode the strengths & benefits to be unleashed by all the stakeholders i.e. Brands, E-tailers and Consumers who are partying at the moment.
- Online shoppers are proven to be more risk-takers and early adopters since they consider gadgets as a part of their identity that they cuddle with.
- There seems to be uproar for features by Indian youth which is even eclipsing the brand enigma and this is the juicy news for any new brand to conquer the most protected forts of reputed brands.
- Alluring products at irresistible price point is an indispensible value proposition for the value-conscious Indian millennial.
- Emergence of transparent and reliable product review & rating ecosystem is the ever empowering contrivance to choose the right product.
TAILWINDS OF E-TAIL
- E-tailing can help reduce the market penetration cycle times for brands given the captive customer base they own who can be reached and activated within no time.
- Indian e-commerce channels can extend an unparallel reach to rural markets (Predominantly Tier-2 & Tier-3 Cities) which otherwise is a tough nut to crack through traditional retail.
- E-tailers can extend better visibility into customer segments, customer profile and consumer behavior; surpassing the challenges of traditional distribution channels.
- If private labels prove to be money spinners for traditional retail, virtual labels can help e-tailers bloat their bottom-line.
- Eliminating the traditional distribution channels will lead to price rationalization which is a sustainable competitive advantage.
- Brands can save phenomenal marketing dollars for product launch and massive capital investments in setting up the traditional supply-chain.
- Better capital efficiency can be achieved through reduced cash-flow cycles when compared to traditional big-box retailers whose payout cycles are 90-120 days.
- Brands can build online communities of loyal customers which may help them to sustain their brand equity to launch new products and to further extend their customer base.
Having said that it is a win-win for all the parties, there is an evidence of irritable deal breakers like; lack of offline ecosystem for after-sales service, increased bargaining power of e-tailers due to extreme dependency on single channel, limited market reach, inadequate growth of online shoppers, disloyal customers which may push these marriages to doldrums. Let the time decide tenacity of these weddings and veracity of these disruptions!!
[About the author: Ram Nutakki is trying to contribute his best to the startup ecosystem while advising and mentoring startup enthusiasts through online media platforms, idea validation camps and other startup events. He is a first generation entrepreneur who believes that Indian entrepreneurial diversity should spread beyond technology sector while counting on the strengths of burgeoning Indian economy. He can be connected at in.linkedin.com/in/urmaverick?]