By Nikunj Gupta
Edited by Anandita Malhotra, Senior Editor, The Indian Economist
Whenever someone says the words, “E-retailing” or “Online retailing” around the globe, the first thing which comes to the mind of any entrepreneur listening or perceiving is India. With the booming new sector developing and progressing at amazing rates in India, it is one of the most economically viable sectors today in India.
For almost 10 years now, we have been reading, discussing and researching about how internet is becoming a necessity these days, not only for corporate sector but also for residential consumers especially after the swell in social networking sites, applications and smartphones. In such a scenario where internet is being used in almost every aspect of our lives, making a business out of internet would only seem logical and viable. But given that, the question we face is what is it that is so unique or appealing about the internet businesses that have revolutionized the industry. Finding the root or cause of this problem is really simple. The answer lies in studying the modern day consumer, his tastes, styles, preferences, needs and wants which will ultimately give you the answer, “comfort”. The modern day consumer wants as much comfort in his dealings as much as he can get without having to pay a hefty cost. You might think that this fact had been discovered many years ago but it gained a forefront only recently when company started using internet to facilitate this end.
Before E-businesses, the companies still aimed at maximizing consumer’s comfort, but everything has a limit and it can’t be extended above it. Ask yourself, how comfy can you make it for a consumer buying clothes at a store? You can get appealing showcases for clothes, good ambience, facilities like washrooms, drinking water for consumers but everything has a limit till which you can stretch it and once this limit was reached, all the companies had to innovate and come up with something new to capture the consumer’s attention. After all what is a company today without innovation? This is one more topic which demands extensive discussion but let’s save it for some other day.
Now we have discussed two scenarios- the potential of E-business and the dire need to innovate and make your product more accessible to consumers and comfortable for them to enter into transactions. Today’s online retailing scenario is what you obtain by combining both of these things- accessibility and e-business. Taking the regular retailing and business for luxury and necessity goods online is nothing short of genius! Already having such a large user database, the internet provides ample advantages for online retailing. The consumers just need to open their laptops, browse through, select their product and voila, then they just have to wait while product is delivered at their doorstep. If we analyze and check how much effort of consumer is saved in process, it seems incredible and it then makes the fact obvious that it was only a matter of time before online retailing gained momentum and popularity.
Now, one can argue that the mindset of a common Indian works in a very different manner. The major characteristic of their thinking is – trust issues and herd thinking. Indians are very skeptical and don’t easily accept or trust innovations or new things and don’t easily change their habits. If you think of it, it only seems obvious why would someone instantly change their way of doing something and that too by relying on something completely new or different. But then we have the herd thinking, a person follows wherever majority goes meaning if you get confidence of even majority of people, you can easily capture market. This merely required giving people an incentive to change their normal way of shopping and using online retailing. After all, what is an incentive but something which encourages a person to act in a desired manner? This end was achieved by online retailers by giving heavy discounts, offers, class quality service and as many services as possible to win customer’s confidence and increase their comfort.
After that it was just a matter of patience and wait and watch game, as the masses swelled the online retailing of goods.
Some companies have started innovating and exploiting the potential of online retailing. One example we have is jungle.com on which you can search for any consumer product and the site would compile a list of sites on which this product is available (like flipkart, Snapdeal etc.) with its going price on each site facilitating consumer to compare prices and availability of products.
Thinking of online retailing in this perspective, we can conclude that online retailing might be responsible for the recession and reduced dealings and business of our regular stores and companies who could not harness the potential of internet.
Online retailing still has a lot of scope which can help change the industries today; however it is a separate question whether the change would be for good or bad? And then again, for whose good and whose bad?
Nikunj Gupta is First year student pursuing economic honors at St. Stephens College with an ardent desire to pursue Masters in economics at post graduate level and make a career in corporate sector afterwards. He loves listening to music no matter what the time of day is or the place is. Being a foodie and a couch potato, he loves to cook, eat and watch sitcoms. He has a keen interest in studying more about finance and stock markets. He devotes the rest of the time to photography and playing sports like badminton.