The Struggle is Real - The Impact of E-Commerce on Traditional Retailers in India

Traditional retailers and naysayers have mostly held a pessimistic view of e-commerce ventures, but the impact is palpable. This time, they can't brush it aside
Arun Nair - Author

The claim that e-commerce businesses are giving traditional retailers a run for their money is not apocryphal, but the ground reality. This has been a phenomena in the recent years and has been catching up rapidly with the others.

Recently, I visited one of the most popular (and highly rated) camera stores in Bangalore to upgrade my DSLR and lens, with the hope that I would get a price better than the ones advertised online. I was disappointed with the deal offered, and it was only about 5% cheaper than the online counterpart. I could apply an ebay voucher and make up for the deficit. When I reminded the shop owner that a better discount was available online, he got defensive and went into a tirade about how he was in the business for decades and knew better. I could clearly see his frustration, a sense of denial in a losing battle.

He was not an exception; just a few days ago when I visited a computer wholesaler I asked him how the business was, and he replied that the business was down over 30%, hit directly because of online retailers like Amazon, eBay, Flipkart and the likes.

This is not a phenomena specific to computers or consumer electronics, the tremors are felt across retailers. The early days of e-commerce in India were driven largely by the computer savy, but as Internet consumption is becoming mainstream and online security measures are tighter than before the inhibitions are dropping and a large wave of Indian consumers are buying online. Large etailers like Amazon and Flipkart have the advantage of scale and logistics that make it easier for most Indians to buy just about anything online without leaving the comfort of your home. Open your favourite newspaper or watch your TV show and chances are you have been exposed to an online mega sale, the likes of which we have never seen before.

So how does a traditional retailer deal with it? As the old saying goes, "if you can't beat them, join them!" Some of the retailers are now gearing up for a strong presence online.

This could be in the form of ...

  • Selling their goods and services through e-commerce portals like Amazon, Flipkart, eBay, Snapdeal, Myntra (for apparels) etc.
  • Exclusive storefronts in the aforementioned websites.
  • Setting up a strong digital or social media presence and driving sales.
  • Enabling e-commerce on their own website and tying up with a logistics provider to manage supply chain.
  • Creating a hybrid model where you could buy the service (or product) online and consume (or collect) it at the retail outlet thus ensuring a steady footfall.

What about those who choose to ignore the online phenomena completely?

For many of them, its a death spiral. Sure it won't happen now, there will be a delay, but its inevitable. Some of them will however be sustained by the purist consumers who prefer to buy it the traditional way. One could argue that certain traditional businesses will thrive and flourish even with the ominous cloud of etailers.

They said that about my favorite bookshop too, but it shut down last October and ironically been replaced by the office of an e-commerce portal.