By: Ravi Sinha
Track2Realty Exclusive
Beyond the debate of front-end cost of the retailers driving new-age innovations into virtual world, the question is whether it is a natural growth progression of the retail and the future of organised retail in India? Experts believe it would be premature to make a sweeping statement since after sale user experience has been the bane of Indian retail. That is the challenge today. But then it is new industry and most of the retailers are short of skilled manpower. Online retail also promises to bridge this gap since training is much easier in online. It is all centralised so one can channelise it for better user experience.
After all, the shift from traditional to modern and now online has been very limited and the prospects look promising for some new entrants only because it is a new and evolving market and there is practically no competition in the segment. Moreover, the delivery happens in 48hours and it means that the customers will use online retail for the monthly groceries and not ad-hoc purchases. How will they compete with the local kirana stores that are still catering to the compulsive needs of the buyers? Experience suggests that organised retail in India has not been able to give that kind of customer service which local kirnaa is known for.
“The question of local kirana completely getting displaced doesn’t arise. Local kirana will always continue to thrive, they will find their own different ways and they will continue to cater to the impulse need of the buyers. Online is a very tiny segment of the retail but if you see how online is bridging all the gap that these two format have. We have been able to bridge this gap, but we have not been able to bridge cost and time gap. The growth rate of organised retail year on year basis is what online retail is seeing on a monthly basis. Online also gives you a price advantage,” says Ambuj.
Well, blame it on supply chain hurdles or high occupancy rate of front-end real estate, the fact of the matter is that organised retail has failed to emerge as a case study in one of the largest markets in India. The next wave of reforms seems to be on the cards with the proposed FDI in retail, as and when that happens. But more than the fund infusion, what organised retail in India needs to understand is that they have to not only bridge the trust deficit among the discerning buyers but also having their own distinct USPs. There is a market big enough for every format in the country—neighbourhood kirana, organised retail and virtual retail, only if they concentrate on the enhanced user experience. Till then every retail format is experimental and not complimentary to other formats.
