From Retailing to E-tailing

With a population of 1.2 billion and a continued population growth rate of 1.41% and a consistent GDP growth rate hovering around 8%, India is a big market with strong fundamentals. Over 63.6% of this population is in the 15-64 year age group. India definitely is the future of the world. But this numbers come with small footnotes. India is still a developing country and over 60% of its population still lives in villages.

Gandhi, aptly said, ‘The true India is to be found not in its few cities, but in its seven hundred thousand villages. If the villages perish, India will perish too.’ This simple yet strikingly emphatic statement by the Father of the Nation holds a million dollar mantra for policy-makers at the Capital to the Market-eyeing companies at the Commercial capital alike.

The message for marketers is unpretentiously austere. Creating innovative channels of communication to reach out to these masses. Could the buzz word internet hold the key? India is world’s second largest & fastest growing telecommunications industry with over 852 million mobile phone subscribers. Amongst these over 214 million users access internet. Could this mean a huge market gaining momentum for online shopping & how the marketers need to adapt to this changed market space- from real to virtual!

Online portals like Letsbuy, Flipkart, Fashion And You, Yehbhi and Snapdeal have seen positive investments to the tune of $5 million to $ 20 million from funds like Tiger Capital, Indo-US Venture Partners, Helion Venture Partners, Sequoia Capital and Accel India. Tasting success online away from their traditional brick and mortar retailing, even players like Shoppers Stop and Future Group are eyeing e-tailing.

The E-tailing model has many an advantages that are unique to its virtual presence. The first is definitely the reach of the medium to small towns and villages and other hitherto inaccessible terrains. Even in tier I towns like Mumbai and Delhi, where the real estate rentals have touched strastopheric levels, the e-tailing is seen as a great respite by sellers. And most importantly if well-positioned, e-tailing can be positioned as cool and more in sync with today’s e-generation. The economy of online operations is another great advantage as there is little inventory pile-up or real estate costs to hold inventories or open stores. Yebhi.com, for instance, has advantageously used these cost advantages to offer ‘flexible return policy’ to its customers. For foreign investors too, it could be an interesting way to understand the market before it makes a physical entry into the same.

Advantages notwithstanding, e-tailing model is a tight-rope which involves immense creativity and out of the box thinking. As the website virtually becomes your online store, reaching out globally to different markets, in the opinion of the author, homenigesation  with differentiation becomes extremely important. In other words mac-donaldisation of the site! Marketers must understand India is a culturally diverse, linguistically rich and geographically disperse nation. An adaptation of the site suited to these cultural sensibilities with an option to access in multiple Indian language can be a strong value add and differentiator.