The ecommerce game has just begun and expect 2012 to be the year which differentiates men from boys. While ecommerce was all about price cuts, the real game has begun with retailers launching their online stores and directly competing with ecommerce players.
Leading retail stores, Croma (Tata owned) and Vijay Sales (which is among the top retailers in Western India) have launched their online store – Cromaretail.com and vijaysales.com, respectively. While Cromaretail is powered by Interface Business Solutions, Vijaysales is based on Infibeam’s BuildaBazaar solution.
When we decided to go online, we were clear about two things. We’re not a fly-by-night operator and didn’t want to be a me-too website. Croma’s online shop is not a deal site. Product pricing will be constant across our physical stores and e-platform. It’s a myth that online shoppers look for cheap deals only. Our surveys show that trust and credibility drive online purchases..
Manufacturers like LG, Samsung and Nokia are unhappy with the heavy discounts offered by some sites. Croma’s strength will be its after-sales service which most e-commerce platforms fail to offer.
[Ajit Joshi, chief executive officer and managing director of Infiniti Retail which runs Croma/source: FE]
Given the offline and online presence of these ventures and their understanding of customer (i.e. via loyalty points/CRM), expect offline retailers to drive major transformation in the Indian ecommerce market. Unlike ecommerce players who are used to burning (investors) money, the offline retailers won’t burn money on unit economic level and will (hopefully) offer a seamless experience between the offline and online world. And maybe, also offer a reason other than ‘cheapest deal’ to buy online?
In the past, some of the big electronics brands have banned online stores to sell their products as they went below 6% of MSP (Min. Sales Price) hurting the brand value and importantly, breaking the entire trust chain (among distributors).
With offline stores going online, do not expect a pricing war, but we certainly believe that offline retailers will bring an anti-CoD model (maybe, buy online/pick offline, i.e. skip the queue), which so far has been limited to ‘well funded companies’ owing to the losses in CoD model.
CoD in my view is a very inconvenient payment option for consumers and merchants and we encourage our customers to pay online. Over 95% of all orders on Indiaplaza.com are paid online; less than 5% are paid through CoD. This also reflects the high trust factor consumers have on Indiaplaza. Normally customers prefer CoD on sites where they are unsure of delivery. [Indiaplaza CEO]
As far as ecommerce players are concerned, Infibeam’s BuildaBazaar needs a special mention here, as they have moved offline stores like VijaySales, TheMobileStore, VIP, Prestige and Crossword etc to online and have created a platform, whose benefit they will reap in the coming years.
Well, the ecommerce game has just begun in India.