e-Commerce is booming in India or not?

1.21 billion people equal to three times of United States but, it is just a part of the story because when this 1.21 billion add with low internet user (1300 million) with very slow connection of around 0.25 mbps, the low credit card penetration & of course the big logistic issue. This all combined together equal to only 10 billion dollar market that is only 1/16^th the size of US market.

 

But, need not to lose hope According to a November report by Avendus Capital Pvt. Ltd on the digital consumer industry, e‐tailing is set to become a Rs. 53,000 crore market by 2015 from the current Rs. 3,600 crore, but still accounting for just around1.4% of the Rs. 36 trillion retail market in India.

According to Assocham , market size of online retail industry in India is likely to touch Rs. 7,000 crore ( US1.43 billion ) by 2015 due to increasing internet penetration across the country, In the year 2011 ,the Indian online retail market was worth Rs 2,000 crore ($408.16 million)and is growing at an annual rate of 35%.

 According to VCCEdge, an online tracker of investment activity, in 2011 VCs and PE investors pumped $500 million into 67 deals, compared with 18 investments in e‐commerce sites worth $112 million in 2010. In the past six months, a number of Internet‐based fashion companies have sprung up, offering affordable ready‐to‐wear clothes while forging brand identities.

The largest Retail subcategories from Comscore data ( Nov, 2011 )revealed that Coupons was the largest with 7.6 million visitors, an increase of 629 percent from 2010 . Consumer Electronics ranked next with 7.1 million visitors growing 12 percent from the previous year, while 5.8 million online users visited Comparison Shopping sites, an increase of 25 percent from the previous year.

Thus we have to keep the patience as a excellent thing take time to happen. Let the figure crossed & not to forget the traditional retailing we need to focus on it to make e-tailing to happen successfully. 

The Floating Store

Retailing is all about reaching to customer in most effective & profitable manner. Customers are everywhere the thing is to reach them. Moving retail are not the new concept but one of the oldest form of retailing that still exist at various form.

One of them that has stunned me is the floating retail store and that too in India really an outstanding way to reach customers. Though retailing on boats not only exist in India in the areas of Kashmir (Dal Lake) but too outside in Vitenam, Thailand & Venuzualla etc. But in small unorganized form. But a retail store in organized way is really incredible that too from the Co-operative society.

The Kerela State Co-operative Consumer Federation Limited has started a unique floating retail store in the back waters of Kuttanad region in Kerela. The chain named Triveni  super stores which operates from eigth in the morning till six in the evening. They keep daily usage items and touch fifty locations. Local customers are happy as they get quality product at most reasonable price at their doorsteps. Now they don’t have to travel to far town area for shopping. It not only saves the time but the money too. They are equipped by internet and powered by solar energy.

Embrace Social Media with Retail

Retail and social media are two aspects of life. The first retail is where people visit in physically brows around and click on what they like sometime dislike, they download what they like the most and they share too. In social media they visit virtually where the involvement of mind is the most they brows around, like/dislike, download and share.

Increasing presence of people in social media, the time spent in it and the percentage involvement is increasing day-by-day which is clearly visible to all, no statistics required.

It has been suggested by many industry experts that around 70% of social media users in India access social networking sites everyday and around there are 7.84% population use internet in India that is more than 9 crore which is now currently stand to 100 million. If I recollect top 5 network sites like Orkut, Facebook, LinkedIn, Ibibo & Twitter they have presence of 10,17,8,5,4.5 million users in India respectively which combined to 52.5 million, if at all I consider the same users in all still there is more than 10 million alone visits this 5 sites & Facebook & Orkut together takes almost 90% share.

The leaders of the world have integrated various aspects of social media in different departments its time now for Indian companies to act upon on social media implementation. Many Indian retailers adopted social media but there is still a lot of it to be utilized & applied. There are lot of communication happning online but there are not many that are being addressed. Threat from specialist retailers is increasing as they increase there presence throughout the country. Brand loyalty will become vital as consumers move towards premium products and exclusive outlets for such brands will discourage them from visiting multibrand stores instead of exclusive outlets where they can see more product variety under the same brand. Multibrand retailers need to move to high brand awareness by engaging with customers more. The interacting level is shows how active the retailer are in social media space. Pantaloon & Shoppers Stop are among the first & second position ththe Lifestyle, Marks & Spencer, Globus & Westside among them. The most active visitors come from West & South India. Some of the amazing statistics revealed that 60% of the social networking traffic come from non-metro cities but the highest one is certainly from metro that is Mumbai. The active user age group are from 15 to 24 except LinkedIn which has 25 to 34 age bracket. The male are 80% where 20% are female users. It reveals that targeting male are much easier through social media than female. The maximum users come from less than 2 Lakh per annum income group (means students & career startups) but this group are the one of the highest spenders we have to keep this in mind. Visitors come almost 3 times a day & 45% around come during day time and spent more time on game & apps.

Thus, it is very clear that whatever the statistics are it is certain that social media will become one of the most inevitable tools for retailers in India in coming years thus they need to buck-up to adopt it not only at above the line but too they need to use it to tap the local market at below the line level.

Why Vishal has to handover its ownership.

Why Vishal Retail has fail despite of such a good reach and every household’s name in tire 2 & 3 cities is a big questions to all. I too also have wondered about it then I researched a little in World Wide Web and come with some surprising facts that led Vishal Retail to handover its ownership to Texas Pacific Group (TPG) and the Chennai based-Shriram Group.

Vishal expanded but without having enough capital. Instead of stabilizing and consolidating themselves first in different places and then moving to newer locations, tried to be the first in every town. When it was ramping up, it spread itself too thin, opening stores across the country. Given that it was selling over 20,000 items in its stores, this made its supply chain complex. They needed to expand, stabilize and then expand. But they wanted to be first off-the-block in every town.

They got the orders from the suppliers but when the stores didn’t work out, the entire supply chain got choked. Its distribution center led model failed as it couldn’t build an IT network. Buying at warehouses was mostly not aligned to what the customers needed and resulted in dead inventory. Vishal is saddled with huge stocks, valued around Rs 550 crore at the end. This is its one of the big problem that responsible for back-to-back quarterly losses. Vishal tried to develop private labels in every single category, but did not have the competence (had limited scale) to support these. Its ticket size has also come down, as it is doing a lot of deep-discounting to get rid of inventory.

Another mistake they have made was to grow the business through short-term debt. The mistake proved too costly. In June 2007, Vishal raised Rs 110 crore (Rs 1.1 billion) through an IPO but this was not enough to meet its scorching growth. It had 50 stores by then and was looking to add 130 more in a year. It tapped the short-term debt market, as it could not bring in a follow-on offer before a year after the IPO. Its capital structure remains a problem.

Where India Stands in Retail Theft.

India on a row once again topped highest in Global Retail Theft (Survey done by GRTB-Checkpoint) this is the fifth year that India has topped. The major part of shrinkage is shoplifting by customers. But, the good signal is that India is the only country where the shrink rate (loss of stocks because of thefts by customer, employees and supplier) came down this year as reported by the Global Retail Theft Barometer 2011. This is showing that now Indian retailers become more concerned about the safety tagging of stocks and more vigilant to exit points. In India, it covered 100 retailers, of which 60 were part of modern chains and 40 were from the unorganized sector.

In Asia-Pacific, shrinkage was highest among categories like cosmetics, perfumes, health and beauty, and pharmacy; apparel and accessories; and video, music and gaming. The most-stolen items from the cosmetics category globally included shaving products, perfumes, lipsticks, scissors, nail clippers, and tweezers. High quality seafood, alcohol and fresh meat made up the top three most-stolen grocery ‘high-risk’ product lines.

The most stolen merchandise by Indians included electronics, cosmetics, alcohol/food, clothing and jewellery as they are small, lightweight and easy to conceal and transport. Retail Association of India, said the survey is being unfair to India. In India, modern retail is only 5% of the total retail, and 95% is still non-modern retail, the survey is being unfair to the market. Modern retailers who have been in the business for more than three to four year know how to handle shrinkage and have managed to put in place systems that take care of shoplifting and employee shrinkage. The actual shrinkage rate for modern retailers, he said, would be less than half of what the survey found.

To reduce thefts, retailers in the nation are spending more money on security solutions. India’s spends on loss prevention at 0.23% of sales is higher than China and Asia Pacific region but lower than the global spends, which are at 0.35% of sales.

How to spot a shoplifter- a small tip:

While the following characteristics don't necessarily mean the person is a shoplifter but retailers should keep a close eye on them who exhibit the following as the chances are more that the person is a shoplifter:

• 1. Spends more time watching the cashier or sales clerk than actually shopping.
• 2. Wears bulky, heavy clothing during warm weather or coats when unnecessary.
• 3. Walks with short or unnatural steps, which may indicate that they are concealing lifted items.
• 4. Takes several items into dressing room and only leaves with one item.
• 5. Seems nervous and possibly picks up random items with no interest.
• 6. Frequently enters store and never makes a purchase.
• 7. Enters dressing room or rest rooms with merchandise and exits with none.
• 8. Large group entering the store at one time, especially juveniles. A member of the group causes a disturbance to distract sales staff.