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Retail players rush to build online presence

Calcutta, April 7: Brick and mortar retail businesses are aggressively tapping the e-commerce platform, following the success of pureplay online shops such as Jabong, ebay, Myntra and Flipkart.

For retailers, adopting the virtual domain has become important to maintain its customer base as buyers are increasingly porting out to websites for a complete shopping experience.

Multinational electronic company Samsung started selling its mobile devices online in 2011.

“We felt it was a natural evolution and the market was ready for this. From the first quarter of last year to the first quarter of this year, online sales have tripled. It gives convenience and is an additional channel having a lot of influence on a customer’s decision and acting as a referral medium,” said Ruchika Batra, director, corporate communications, at Samsung Electronics.

“At present, online sales contribute 5 per cent to our overall sales, with the bulk coming from mobiles and tablets,” she said.

Avon India, a direct seller of cosmetics, has seen its sales online surge 70 per cent in the last one year. Ujjwal Mukhopadhyay, managing director of Avon India, said the online mode had helped its representatives connect with remote customers. The company has made e-brochures available online, and representatives do not need to be physically present everywhere for business. The company has 30 per cent of its business coming from online.

Imaging company Canon, which operates a franchisee-run offline retail model, has seen existing partners taking the support of the online mode to promote sales.

“We sign a deal and only support those partners online who do not do heavy discounting or get their products from the grey market. That is a difficult proposal for an organised brand like us. We do not want our offline partners to be at a disadvantage. Online sales should account for 25 per cent of our revenues in two years from 10 per cent now,” Canon India MD Alok Bharadwaj said.

“In the US, e-commerce is a 17-year old industry. Over 85 per cent of the top 1,000 retailers in the US are present online. In India, less than 5 per cent of the top 1,000 retailers have an online presence. As yet, very few retailers have adopted it. It (adopting e-commerce) is a late development and only the last two years have seen some signs of mass adoption,” said Sandeep Aggarwal, founder and CEO of Shopclues.com.

“Online retail has an edge over brick and mortar retail business as it is not dependent on real estate,” he added.

Branded garments brand Turtle feels retailers moving online will not generate much competition. “We are just at the tip of the iceberg in the online industry. No cannibalisation will happen. If one of our big brick and mortar stores does revenues worth Rs 2 crore, we will target in the same from our online store as well. We should get this target in 18-24 months,” said Turtle director Shitanshu Jhunjhunwala.

 
 
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