Crocs logs out of 10 e-commerce sites on discount pinch

Written by Kirtika Suneja | Vaishnavi Bala | Mumbai/New Delhi | Updated: Apr 2 2014, 06:36am hrs
E commerceIt's not just the electronics brands, even fashion and apparel firms are beginning to feel the heat of steep discounts being offered by e-commerce websites.
It's not just the electronics brands, even fashion and apparel firms are beginning to feel the heat of steep discounts being offered by e-commerce websites.

Premium footwear firm Crocs India pulled its products out from at least 10 e-commerce sites because of the discounts offered by the online portals.

The company has instead tied up with two e-tailers, Amazon and Jabong, to exclusively sell its products in the online space.

The tie-ups are part of the company's new online strategy as part of which it will sell its products simultaneously with the brick-and-mortar format.

While the two e-tailers will offer the entire range of Crocs shoes comprising 70 styles, they will not offer any special discounts or prices that are not available in their stores. The tie up will become operational this month.

The company has pulled out majority of the products from online players as discounts online arent consistent with the companys objectives," said Nissan Joseph, general manager, Crocs India.

Since the barriers to entry in the online space are very less, we want to sell our products only through these two sites. These are the only two authentic e-commerce partners for us. We are limiting ourselves to only two partners who will offer our entire range online as many times our consumers complain of unavailability of all the products in the brick and mortar stores.

Prices of Crocs products are about 20-30% cheaper online than in brick-and-mortar stores.

According to sources, online retailers have resorted to buying stock from Crocs retail outlets to counter the lack of supply on portals.

The brand started its India operations in 2007 through a joint venture with Chogori Retail and later changed to a franchisee operation in the country.

The brand now has a pan India presence with a reach of more than 300 doors at the wholesale level and about 35 exclusive stores.

Over the last two years, the company has restructured itself by reducing its distributors.

Other brands such as French Connection India are being selective about which websites they chose. French Connection retails its new collection only with established players like Myntra, Jabong and Koovs. Apart from these three websites, the company does not retail its new collection on any other online outlet due to the risk of discounting, an executive said.

The confrontation began with electronic companies like Lenovo and Canon asking shoppers not to buy from certain e-commerce companies that were giving high discounts.

The entire retail space is evolving and offline retailers have begun to understand that they need to make changes to compete with the gaining popularity of the online space, said Vikas Chawla, co-founder, Social Beat, a digital agency and e-commerce consultancy firm.

Chawla gives the example of Sanjeev Kapoor's Wonderchef Kitchenware that has kept a 'lowest online retail price' below which the prices of the products cannot go.

This gains importance since the concept of showrooming where consumers browsing merchandise at a store and then purchasing the goods online because of attractive discounts is gaining traction not only in electronics items, but also fashion and other categories.

Online retail, at present, accounts for less than 1% of the total market in India, but this space is slated to grow at 50-55% over the next three years to reach R504 billion (R50,400 crore) by 2016, according to a report by Crisil.

This is close to a four-fold rise from the estimated market size of R139 billion (R13,900) in 2013.

The online retail space is aggressive and it is natural for brick-and-mortar stores to raise concerns regarding coupon discounting. But we are not as affected as we have pacts in place with brands regarding pricing, said fashion retailer Myntra's COO Ganesh Subramanian.