Majority of retailers are calling the season the ˜first online Diwali” as more consumers choose to browse and buy from mobile devices and tablets. With services like click and collect growing in popularity, retailers are adding to the options available, enabling their customers to shop online with the convenience of collecting in store.
E-tailers make it a dull Diwali for retail stores
It is a sight that’s becoming increasingly common across electronic and mobile phone stores: the customer walks in, checks out the product, its price, and then flips open his smartphone and logs on to an e-tailer’s website to check the online price. And more often than not, finds the price offered by e-tailers to be much more attractive.The result: poor sales at the brick-and-mortar shops as online stores such as Flipkart, Snapdeal and Amazon are snapping customers away. Not just for mobiles and electronic goods, but white goods, shoes, clothes, household goods, books – you name it. The online discount euphoria has hijacked the Diwali rush from retail showrooms this year, and not surprisingly, the mood in markets is distinctly downbeat. (Source: http://timesofindia.indiatimes.com/tech/tech-news/E-tailers-make-it-a-dull-Diwali-for-retail stores/articleshow/44727456.cms )
Diwali Online Shopping To Cross INR 10,000 Cr., Footfalls In Malls Will Halve: Assocham
The Associated Chambers of Commerce & Industry of India (ASSOCHAM), which tracks and predicts commercial activities within the country has predicted that online shopping will rule to roost this Diwali. As per their estimations, more than Rs 10,000 crore worth of online shopping would be done this Diwali, which is 350% more than previous year. As per their recent study, August-September period of 2014 witnessed 200% jump in online shopping, compared to the same period last year; which may jump to 350% in the next month due to Diwali shopping spree. Sales of mobile phones have been the primary cause of this exponential increase in online sales. As per the report, mobile sales have jumped more than 100% in the last year. Overall, the online commerce market is pegged at Rs 12,000 crore, which will increase to Rs 1,00,000 crore in the next 2-3 years. It is said that somebody’s gain is always somebody’s loss. The law of demand and supply advocates this saying with economic proof. With the hype and buzz generated by online sales, not to forget flash sales and big billion day sales, the flip side of this whole online shopping frenzy is less footfalls in shopping malls all over the country. The sharpest fall in shopping mall traffic has been registered in New Delhi-NCR region where 49.2% less traffic originated compared to last year. Closely following is Ahmedabad, where 48.2% less traffic came to visit shopping malls, as majority of shoppers are now choosing ecommerce platform with better deals, low prices and ease of shopping. Chennai witnessed 46%, Mumbai 42% and Hyderabad 39% less footfalls in shopping malls. Assocham has been clear in their study that the less footfalls in shopping malls is a direct result of increasing online shopping and adaptation of ecommerce as a preferred mode of shopping among teenagers and young professionals. The research was done in urban locations as well as semi-urban cities in India: Delhi-NCR, Mumbai, Ahmedabad, Chennai, Kolkata, Hyderabad, Chennai, Bangalore, Chandigarh and Dehradun and the results clearly mention that more and more shoppers are not preferring online medium, compared to offline. As per the research conducted in these cities, “more and more choices online, about 55% of both men and 45% women using their smartphones, tablets, laptops and desktops to purchase products online”, points out the paper. At least five out of two orders are through mobile phones. Recently Flipkart conducted a special sale for one day, which left several customers disappointed and angry as complains of price rigging and poor website access flooded the social media. Consumer biggies such as LG and Sony have already declared war against ecommerce portals as they are gearing up to sue such ecommerce companies which advertise extremely low prices to attract more traffic to their website. Even the Government of India has stated that they will initiate enquiry against the complaints lodged by disgruntled customers and electronics companies. Online shopping is certainly the big thing right now, especially during the festive season. But unethical business practices (either offline or online) won’t take them too far. It would be interesting to observe how ecommerce companies now cope with the high expectations which has been generated. And how business ethics and consumer trust take their course.(Source: http://trak.in/tags/business/2014/10/09/diwali-online-shopping-malls-footfalls/ )
Flash sale: Flipkart triggers fierce Diwali e-tailing fight
Gone are the days of visiting crowded city markets for Diwali shopping. True it’s time to go click click, but is the sale offered by the likes of Flipkart for real? The social networking world is buzzing with bitter experiences many online-shopping freaks had with the flash sales offered by Flipkart with some calling it a sham. Customers have accused the e-tailer of inflating prices of many products in the last few days. For example, the price of Calvin Klein Be Eau de Toilette perfume was hovering around Rs 1,650 for the last three months. Suddenly it has been raised by around Rs 300 and is now available at Rs 1920. After deducting the discount, it works out the original price. While Flipkart and Snapdeal boast of huge sales through these flash sales; it has to be seen how rival Amazon manages to satisfy some of these disgrunted customer with its Diwali Dhamaka Week (October 10-16). Just one day after e-commerce giant Flipkart’s Diwali flash sale, Big Billion Day , Myntra’s ˜Cracker of a Sale” is all set to woo you with a flat 50 percent discount on purchase variety of products like clothing, footwear, jewellery, watches and accessories Also, it assures of a cashback on every order. Flipkart, India’s largest ecommerce giant recently acquired online fashion retailer Myntra in an estimated Rs 2,000 crore deal. Meanwhile, rival Amazon and Snapdeal have also left no stone unturned to make their mark in this race. Snapdeal was offering products at rock-bottom prices at its hourly Diwali Bumper sales on October 6. It claims to have clocked sales worth Rs 1 crore a minute, which is nearly equal to Flipkart’s sales figure of over Rs 600 crore in 10 hours. Both Flipkart and Snapdeal have been advertising heavily for their pre-Diwali sales campaigns with the latter taking a dig at the former in of its ads. Meanwhile, Amazon also launched a sale from October 4-6, calling it the “Mission to Mars” weekend. However, the company has not announced any sales figures as yet. It is also offering 10 percent cashback on state Bank credit and debit cards. However, most industry experts are quite upbeat on the future of India’s e-commerce sector, which is likely to become a USD 20 billion industry by 2020.(Source: http://www.moneycontrol.com/news/business/flash-sale-flipkart-triggers-fierce-diwali-e-tailing-fight_1197468.html)
Amazon and Future Group ink deal to sell goods online; starting with apparel
The world’s largest online store Amazon and India’s largest listed retailer Future Group have signed a deal to jointly sell goods over the Internet amid growing friction between online and offline retailers over heavy discounting. Future Group will sell more than 45 own labels of apparel initially, followed by in-house brands in the home, electronics and food categories, while the US-headquartered company will handle order fulfillment and customer service for the merchandise on its portal. Both firms will also develop a new line of products across categories to be exclusively sold at Amazon and Future Group’s retail stores. ET was the first to report, on October 3, that Amazon founder Jeff Bezos and Future Group’s Kishore Biyani met in New Delhi to discuss an alliance. The complaints by traditional retailers led to the government saying it would examine the policy on ecommerce. Following this, Amazon’s October 10-16 Diwali Dhamaka Week has been a subdued affair with sharp discounts restricted to stock clearances and products only being sold on the site. Under the deal, Amazon and Future will also jointly develop discounting strategy and price tags on their products won’t be very different from rates at stores so that both channels don’t end up cannibalising each other. In its home market, Amazon had similar alliances with retailers such as Target Corp and Toys R Us in the past decade though both soured over time once the online seller gained scale and attracted other large brands. Following the India deal, Future Group’s four dozen own brands such as Lee Cooper, John Miller and Indigo Nation will be taken off from other online marketplaces where they are currently being sold. Amazon’s agreement in India also indicates its aggressive intent to spread itself across many product areas quickly in India especially foods a relatively niche category for online retail, which it has only recently entered. In July, the US company announced it would invest $2 billion in India operations that exceeded gross merchandise sales of more than $1 billion within a year of its launch. It completed a year in June this year. Meanwhile, it was reported recently that Amazon plans to open its first brick-and-mortar store in New York. The company’s main rivals in India are Bangalore-based Flipkart and Snapdeal, the latter a Delhi-based company that counts eBay, Azim Premji and Ratan Tata as investors. Together, they have sold goods worth more than $4 billion, with Flipkart alone estimated to have crossed $2 billion. The battle is set to intensify. According to a report by consulting firm Technopak, the $2.3-billion e-tailing market is expected to swell to $32 billion by 2020 and account for 3% of the total Indian retail sector. In the offline retail market, just three companies Aditya Birla’s Madura Garments, Arvind Brands and Future Group either own or sell more than two dozen brands each, thus becoming the preferred options for any online player looking to partner retailers. The move holds benefits for both sides, but there are pitfalls as well. Future Group has more than 75 own brands that earn it at least 15% higher margins on average compared with national brands, which is why Biyani is bullish on private labels across categories. The tie-up means Future Group’s brands that now have a presence in 98 cities and towns will be marketed to 19,000 PIN codes serviced by Amazon across India. Industry insiders also said the Indian retailer’s move reflects a bid to expand into new distribution channels such as ecommerce in the search for growth. Last month, Snapdeal agreed to create Croma’s Flagship Store on its ecommerce portal to sell electronics items including mobiles, tablets and laptops. The $3-billion Future Group, on its part, has opted for SAP’s Hybris OmniCommerce solutions and plans to invest nearly Rs 100 crore to beef up its ecommerce venture. It is targeting about 20% of revenue from online sales over the next 18 months. By 2020, the aim is even higher at 40% of its sales through ecommerce or virtual platforms.(Source: http://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/amazon-and-future-group-ink-deal-to-sell-goods-online-starting-with-apparel/44796899 )
Amazon launches online appliances store
E-tailer Amazon today said it has launched a store on its online marketplace featuring a wide selection of home appliances such as refrigerators, washing machines, air-conditioners and dishwashers. As home and kitchen is one of the most sought after categories during Diwali, the launch comes at a time when customers can enjoy shopping for appliances with ease and convenience, the company said in a release. From the comfort of their homes, customers can access a large selection of appliances from leading global and Indian brands like LG, Samsung, IFB, Panasonic, Voltas, Godrej as well as from retailers such as Viveks, Shahs and Next, to name a few, it said. For additional convenience and a worry-free shopping experience for customers who purchase these appliances on its marketplace, Amazon.in will help with scheduling of a hassle free installation and demonstration service from the respective brands and retailers, the release added. Amazon said customers buying from Amazon.in’s Large Appliances Store can take advantage of an extended warranty offering 1-year and 2-year extensions beyond the brand warranty. This repair and maintenance service will offer hassle-free digital warranty for customers and provide market-leading customer service. In addition, customers also benefit from free transportation for repair as well as free annual preventive maintenance. The extended warranty program is available for purchase from Rs 675 onwards, it added.
Diwali Bonanza: GroupM, Google join hands to launch mega festive sales online
GroupM will bring in the brands that will sell their products on the website, Google will help with the technology for the shopping festival that will run for three weeks starting October 1. Grand Diwali Mela is taking offline festive experiences online South Asia. It will allow users to window shop, browse merchandise and, in some cases, sample products as well, just like your local mela. The festival site will have all kinds of categories including real estate, automobiles, consumer durables, electronics, FMCG products, music and entertainment. A number of FMCG brands will sample their new food and beverage products through the website, officials said. The real estate segment will provide information on new properties including layout plans and facilitate site visits. Similarly, people interested in cars and bikes can get details of different models and schedule test drives on the site. GroupM and Google are in the process of signing on brands – including those that Group M does not handle – to participate in the event. GroupM has already ideated and created an advertising campaign to promote the Grand Diwali Mela across different media platforms including TV, radio, print, internet and social media. Officials said that if the Diwali festival proves a success, than they will host similar events around other major festivals and occasions.(Source:http://articles.economictimes.indiatimes.com/2014-09-25/news/54317890_1_google-india-rajan-anandan-shopping-festival)
Online Retail’s Brisk Growth Attracts Investors in India
As online shopping posts brisk growth in India, investors are pouring billions of dollars into e-commerce companies. But small-shop owners worry about falling customer traffic and loss of business. It’s the time of the year when Indians shop feverishsly as the Hindu festival of lights, Diwali, approaches on October 23. Some want to redecorate homes, others have saved up to buy new clothes, fashion accessories, televisions or mobiles. But instead of picking these up at stores, millions logged onto websites this week to grab the best deals as online companies announced deep discounts for the festive season. Many were disgruntled as goods disappeared quickly. Some sites came crashing down due to heavy traffic. Nonetheless the electronic shopping spree put the spotlight on the rapid strides e-commerce is making in India. India’s largest online retailer, Flipkart, said it clocked up sales of $100 million in a day during its discount offer. Penetration of smartphones and access to the Internet has fuelled the online bazaar. And the money is not just pouring in from India’s big metros. The huge growth potential has led to a surge in investments. Amazon recently invested an additional $2 billion to ramp up its presence in the Indian market, where it made its debut last year. India’s biggest player, Flipkart, has raised $1 billion from local and international investors in recent months. Several other online companies, like Snapdeal, have also raised millions of dollars as investors put their faith in the Indian online market. The infusion of capital is helping them rapidly expand the market. But not everyone is happy as more and more and more people log online. In a popular market in Gurgaon, store owners selling electronic and electrical items are despondent. That has led to an outcry from traders, who have complained to the government about the heavily slashed prices on online sites this season, calling them a threat to their businesses and demanding more regulation. Commerce Minister, Nirmala Sitharaman, has promised to investigate the grievances. It remains to be seen how brick and mortar stores will adapt to changing times. But online retailers are adapting quickly to the Indian market. In a country where credit card ownership is still limited and customers can be hard to please, they allow people to pay cash on delivery and to return goods.(Source:http://www.voanews.com/content/online-retail-risk-growth-attracts-investors-in-india/2477870.html)
Conclusion is more metropolitans in India are opting to do their shopping online, especially during festive seasons, to avoid the usual hassle of traffic and queues at shopping malls. This year, they are expecting sales of clothing, bags and accessories, shoes, home decorations, cookies, slimming and beauty products online.