E-commerce biggies wooing local mom-and-pop stores

Hyderabad: When Amazon entered India with its exclusive marketplace, there was unease among India's popular mom-and-pop stores and large brick-and-mortar malls about the impact that the American behemoth could have on shopping trends in the country.

While the impact of Amazon and its Indian rival Flipkart, now owned by another American retailer, Walmart, was immediate on bookshops, forcing even large and established stores shut their business, e-commerce did not have a similar disruptive effect in other product categories.

In spite of the stupendous growth witnessed by e-commerce business in the country, an eMarketer report claims that the online sales were just 2.9 per cent of the total retail sales in 2018. This indicates the size of opportunity that e-commerce players are yet to lay hands on as majority of the customers still prefer to buy expensive products offline.

This conundrum of e-commerce players to reach out to the customer offline while selling online has resulted in them setting up experience centres, where prospective customers can check the products and order online.

Recently, Flipkart has set up an experience centre for furniture in Bengaluru — a strategy adopted by e-commerce players like Alibaba, JD.com among others in China and Asia Pacific countries.

The Walmart-owned e-commerce retailer has tied up with Dubai-based Landmark Group's Lifestyle fashion stores in India. Though this deal only allows Lifestyle to reach out to larger customer base spread across the country through Myntra.com, the companies could at a later stage explore the possibility of using the space at Lifestyle malls to set up experience centres for Flipkart's fashion offerings.

Omnichannel sales model, where retailers sell both offline and online, addresses another major issue — showrooming — that many offline retailers face. Showrooming means the practice of a customer visiting a shop or shops to examine a product before buying it online at a lower price.

According to 'IDC FutureScape: Worldwide Retail' report, almost 50 per cent of existing retailers would adopt the omnichannel platform to cater to the changing customer preferences.

Similarly, Mukesh Ambani-led Reliance Industries is also planning to rope in mom-and-pop stores to channel the delivery of sales made on its online and mobile marketplaces. This model secures the future of millions of kirana shop owners, who feared of getting swept away in the disrupting changes in the retail landscape and allows all players to coexist and synergise their strengths.