Benjamin Franklin

Etailing on its fast growth track

Etailing on its fast growth track


In December 2013, Google organised the Great Online Shopping Festival 2013 (GOSF 13). This second edition happened between 11th and 14th of Dec. 2013, in which some 250 etailing companies participated. This initiative from Google was designed to encourage consumers to shop online.

Press reports say that somewhere around 20 million online shoppers visited the GOSF site, a cent per cent growth over the previous GOSF 12. The success of this online jamboree is a pointer to the growing significance of etailing in the retail environment.

Ecommerce and Etailing in India

In a press release dated 30th Dec 2013, ASSOCHAM, while releasing their research paper “Online shopping – Review & Outlook in 2013”, have stated that the ecommerce market in India is being estimated to be Rs. $16 billion which roughly translates into Rs. 98400 Crores. This is expected to increase by 3.5 times in the next 10 years. Ecommerce covers a larger canvass and includes volume B2B transactions as well, whereas e-tailing is pure play online sales of goods which is B2C centric. Etailing is estimated to share 15% of the total e-commerce pie and in value terms it is estimated to be approximately Rs.15000 Crores. Today, consumers have started purchasing even high involvement items like home furniture or costly jewellery through online stores, and this shows the growing trust of customers in etailing.

E-tailing – Challenges and Growth

The online business model had experienced a challenging time in the initial stage. Besides the inertia to use credit or debit card, the consumers had shown lack of trust in the delivery of goods ordered on time or in their quality. This lack of trust was a major constraint and companies answered this by offering facility to pay on delivery and return or replacement within a specific period. besides regular updates on despatch and movement of merchandise. This, coupled with the enhanced security for credit / debit card usage online, has resulted in more and more consumers trying online purchases. Overall the experience has been satisfactory and this has helped the etailing with support from positive word of mouth. These companies have also done well in terms of handling the logistic issues by developing local supply sources or fulfilment centres. Many of them have now started offering delivery of goods within a day. Easy to use websites, visually rich product catalogues with 3D images and use of Augmented Reality have all been effectively used to engage the consumers when they visit the website of these etailers, seamlessly taking them through the AIDA flow

Etailing – A consumer perspective

What drives the consumer to go in for online purchases?

1. With the double income families, both the husband and wife are time starved and online stores help them make purchases whenever they find time together. Online shopping is possible round the clock. It is 24 x 7.
2. Traffic congestion, parking problem and ever increasing fuel price have become a bundle of disincentive to shop in brick and mortar retail. Online shopping comes in handy as an alternate option for shopping.
3. With the increase in inflationary pressure, online shopping offers definite savings by means of deals, discounts, group buying discounts, bidding plans and so on.
4. Many online shoppers have realised the fact that when they shop online, they order what they want and the scope of yielding to impulse purchases is less.
5. Price comparison engines and the aggregates of product reviews and recommendations on social media sites have proved to be very helpful to make the right choice while buying online.

The Takeaway

With the increase in the online shoppers, the trend that is most likely to emerge in the next 2 to 3 years:

1. Retail chains and stand alone retail outlets would set up their online retail version as a value addition to their loyal customers. They would be able to analyse the purchases of their customers and offer customised grocery and toiletries combo packs for online purchase. Their online store would also double as a customer retention strategy.
2. New companies in the small / medium sectors launching new concept products or improved products in the existing categories would prefer online stores to reach a larger audience beyond their base market. This would be the case for niche products like gourmet coffee, exotic tea, herbal products etc. For the smaller enterprises setting up the conventional distribution or retailing infrastructure is a humongous task.
3. Attracted by the growth in etailing, many new players are expected to set up shop in both specific category of goods (like footwear) and multi products.
4. Online exhibitions for etailers and online shopping festivals would become more visible to get more customers online.

To conclude, every organisation should evaluate the merit and urgency of having an online shopping facility for their goods or services as an additional channel to reach and service their customers.


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