India’s e-tail business to grow despite competition from brick-and-mortar stores

Though reopening of the economy may bring shoppers back to stores, they will not completely abandon online shopping, says a Financial Express report. India’s e-retailing business is expected to grow more robustly in 2021 even though competition from brick and mortar stores may increase customer acquisition costs. Indian e-commerce space is becoming more competitive with players like the Tata Group entering the market, says Harsha Razdan, Partner and Head-Consumer Markets and Internet, KPMG India. Along with B2C, the B2B e-commerce segment will see a lot of action next year as retailers will transform mom-and–pop stores into larger marketplaces. Unorganized and larger players will explore kirana stores to expand their presence. For instance, five-year old retailer Jumbotail will help 30,000 kiranas digitize their stores. The company will convert these stores into modern convenience grocery outlets while JioMart will help fulfill orders placed by kiranas by sourcing products from their distribution centres and network of stores. As per Ankur Pahwa, E-commerce sector leader, EY, many of these marketplaces will also try to help generate demand for their B2B customers.

Next year to be a year of partnerships

Anurag Mathur, Partner & Leader- Consumer Goods and Retail, PwC, believes, 2021 will be a year of partnerships. Mathur says brands and marketplaces will soon be joined by other smaller FMCG companies to determine the price of some categories like electronics. Razdan says, though consumers might download a number of shopping apps in the coming year, they will use just a few of these. They will mainly be attracted mainly by a brand’s strength and its consumer friendliness. Most brands therefore, would have to partner with other apps or platforms.

Partnerships between offline and online retailers will continue to expand in 2021, says Pahwa. According to him, having realized their interdependence, both physical stores and online marketplaces will explore each other’s strengths to create a strong brand presence.

Online retailers to expand product offerings

On their part, online retailers will try to attract consumers by on-boarding more SMEs. They will strive to diversity their product offerings to suit local tastes, says Mathur. This would help them to retain consumers, he adds. However, as they expand their supplier base, they would also have to maintain quality standards and keep their customers informed about their new offerings. Smaller suppliers, not used to making deliveries within specified time periods, would have to abide by their commitments. These suppliers would have to be monitored by bigger marketplaces to ensure timely deliveries to customers, adds Mathur.