Is East Ahead With E-Retail Boom Or A War Of Claims?

Since China's Single's Day promoted by Alibaba became the world's biggest online shopping day & one could notice the fiercer power struggle going on at the Indian turf, when the advertisement campaigns of the three most powerful retail arch rivals began in the last week of September.

Flipkart's 'Big Billion Day', Snapdeal's 'Unbox Zindagi'& Amazon's 'Great Indian Sale' together took up the Navratri and Diwali season on television very seriously. Their fourth competitor 'e-bay' is also doing a great deal of efforts to sustain in the race and to cash on the October opportunity splurging more than Rs 200 crore on its rebranding project which coincides with the festive season sale. You must have seen the '#Things don't judge' electronic campaign.

It is not easy to understand the dynamics of economy and reflect on one's culture because the basic idea in e-commerce is that, 'Everything needs to be local, including products, payment methods & services.'

Strategizing, Incentivizing & Merchandizing
Similar kind of incentive structures had been bought in by the e-commerce marketplaces, just as Flipkart lined up an incentive structure to push 2,000-plus sellers across cities and rewards with sellers will get additional rewards. It evaluated sellers on the basis of number of units sold and gross merchandise value, among others. It can be said that the online marketers have necessarily changed their focus from lucrative discounts to the quality of service & products and improving consumer shopping experience and creative marketing.

While Flipkart has set aside Rs.30 crore for BBD marketing and advertising campaigns, Amazon India's marketing budget is Rs.125-130 crore An Amazon India spokesperson said it is working closely with partners for the biggest sale ever for customers. Around 20,000 sellers have joined the Amazon marketplace in the past 5-6 weeks to benefit from the year's biggest shopping season.

But according to industry experts, in spite of the heavy ad expenses, this festive season's combined sales figure won't exceed Rs.10,000 crore.

However, the increasing trend of buying online in Asia, is the a major turning point for e-tailers worldwide keeping in mind the larger populations & tackling challenging demographics. Well, the numbers say it all which talk about travel bookings, restaurant sales and event ticketing via the internet from any device - have reached close to $1.95 trillion in 2016, accounting for 8.7% of the total retail spending worldwide (according to e-marketer).

While e-commerce grew to $835 billion in Asia in 2015, Asia-Pacific region is still the most alluring of all. Paticularly, in India and China since reportedly, the overall online sales were up by 54.5% in 2015 ($ 220 billion) from 2015 at $142.4 billion which brings ecstasy to the e-marketers. China alone to account for 47% of the worldwide sale.

But according to industry experts, in spite of the heavy ad expenses, this festive season's combined sales figure won't exceed Rs 10,000 crore.

Big E-tailers & Big Claims
The story began when Rohit Bansal, co-founder of Snapdeal, tweeted: "Looks like India has chosen @snapdeal as the app of their choice this festive season!"

Flipkart said it "saw 25 items sold per second." The company said 10 lakh products were sold in the first 10 hours with 6 million visits from across the country.

Snapdeal said that it sold five mobile phones every second on Monday as it racked up total sales of $100 million.

Amazon India claimed that the first day of the festive sales was the biggest day in its history, four times bigger than the peak of last Diwali. Traffic from mobile was over 70% and lakhs of new customers came from tier-2 and tier-3 cities like Aurangabad, Malappuram, Dhanbad, Kannur, Tiruchirappalli, Jamshedpur and others.

Subscriptions to go a long way?
Subscriptions could well be the next big thing in the Indian consumer market if one closely trailing a trend in developed markets in the East. Though, the replenishment-based subscription could be a better model and become a real disrupting factor for the industry as whole.

Big online players like Flipkart has already delved into the model but are yet to adopt it on a regular way for all its products & services. It could be a disruptive practice as then consumers could avoid their weekly shopping trips.

This is the reason Unilever acquired US-based 'Dollar Shave Club', an ecommerce startup that sells shaving products to subscribers. Small startups too have a 15-20% consumer base growth where unique customers are joining in at month to month basis. However, this trend is not restricted to startups for example Parag Milk Foods, the seller of Gowardhan dairy products also used subscription to sell the premium milk brand Pride of Cows, delivering it directly from farm eliminating middlemen.

Amazon India offers a 'subscribe and save' feature that allows customers to get regular deliveries of items such as diapers, razors, liquid hand washes, toothbrushes and talcum powder at a discount. There seems to be a lot of potential in food & beverages and personal care segment. However, the others want to assess its prospects before taking the plunge.