Brick and mortar retailers across India have adopted a guarded approach to the massive growth of e-commerce platforms in India. However, to address the concerns of all parties including consumers, they need to build a more cooperative relationship between these online retailers.
Growth in digital and telecom infrastructure made internet affordable to all Indians allowing them to connect with users across the country. This has led to a growth in the number of internet users from 500 million in 2018, to approximately 630 million by the end of 2019. Much of this growth is propelled by rural users which grew by a rate of 35 per cent in that time period. This improvement in connectivity has also led to a growth in digital literacy as online platforms operating in Hindi and other Indian languages are being set up.
Benefits of online presence
Online presence can benefit retailers in multiple ways: Expansion in geographical reach. Having an online presence can help a retailer expand his geographical base. Delivery networks can be expanded to send goods beyond own personal reach. For example, a Banarsi silk sari seller in Banaras can sell across the country through Amazon. Similarly, clothe makers can only increase sales while introducing new styles through their presence on Flipkart.
Online platforms also help regional handicraft retailers to sell goods to customers across the country and establish themselves on global marketplaces. If the retailer is not willing to use the e-commerce platforms own delivery network, then they can use third party options for delivery, with the delivery costs recouped from the customer separately.
Offloading of business expenses
Online presence also enables retailers to reduce costs by offloading various business expenses through partnerships. They can offload expenses such as inventory management and storage which is easier to address when your customers are expecting delivery, real estate etc. Online stores also reduce the costs of initial startups that brick and mortar retailers face. These retailers can avoid the additional costs of a physical space and its ongoing expenses in the form of rent, electricity, etc.
Higher revenue growth
Another advantage for online retailers is they see higher revenue as compared to their brick-and-mortar counterparts. This can be seen from the fact that India’s retail e-commerce revenues are likely to increase from $20.5 billion in 2017 to $62.3 billion by 2023, with the industry’s revenues slowly cannibalising the share of the entire retail industry.
Easy management of reputation
It is easier for online retailers to manage their reputation as they can proactively and reactively influence consumer perception of their brand. Through their interactive websites, marketing styles and user reviews, these retailers can implement changes as per consumer demand at a fast pace. They can also respond to negative feedback and acknowledge positive comments in order to improve their reputation in the market and make consumers feel heard.
Lastly online retailers provide innovative facilities such as tracking, quick customer care, sourcing and delivery support that brick and mortar retailers cannot. This makes buying goods, returning them, collecting a refund and much easier and a lot more convenient.
Over the last decade, increasing desire for convenience for buyers and the potential of reaching out to a larger market for sellers has made online retail the new norm. Through their online presence, offline retailers can access opportunities that would otherwise be inaccessible to them. Thus, as digital India booms, digital platforms have become the new means of human interaction.