So much has been written about the e-tailers gnawing away at the traditional brick & mortar retailers’ market over the past 2-3 years that to a layman it would appear that the traditional retail store business in India is on its death-bed.
I find it extremely amusing.
To begin with, the ridiculously cheaper merchandise being offered by many e-tailers is a phenomenon which simply cannot be sustained in the long run. A fundamental principle is at play here: no business can continue to sell at below cost and survive forever. Secondly, many of the big boys in the online retailing model are selling brands, which would simply demean the very concept if they continue selling merchandise for a song over the internet.
Moreover, the online retail model is appropriate only for standardized products. That’s not the case with fashion apparel, where the traditional trial rooms and fast-paced fitting/altering facility at physical stores continues to draw shoppers. For instance, why should the shopper have to go through the trouble of altering the length of a pair of jeans he has ordered online at his local tailor, who anyways doesn’t have the expertise or the time to bother with such fitments? Wouldn’t it be much simpler to just walk into his nearest fashion retailer, try out the jeans in the trial room and to get the necessary alteration done in a matter of minutes at no extra cost?
As someone for whom retail runs in blood, and who set up one of the country’s first organized retail business, it’s as natural as breathing to visualize the retail landscape in India. Out of the total 600 districts, only around 150 have the presence of such e-tailers; as for others, notwithstanding the mobile internet evolution and thousands of articles propagating how mobile is “uplifting” rural folk such as farmers and other classes, the stark reality is completely different. Factors such as illiteracy, economic and technical feasibility, infrastructure etc. are, and would continue to impact any online business in such locales for a very long time, and where such a business model would have minimal public knowledge.
As a businessman, I am not putting down the digital retailing wave; however, I feel it’s important to pick the nerve of shoppers – and a large part of that would continue to fall in the realms of the physical retailing.
The bottom-line is that sustainable affordable fashion would be the key, of which traditional retailing would continue to be prominent in India.