You have a very strong offline presence in Big Bazaar and Food Bazaar. Is Futurebazaar just an online brand extension or do you plan to establish it as a separate retail entity altogether
Let me assert right at the onset that Futurebazaar is a separate brand. We debated doing BigBazaar.comwhich would have been a true brand extension, but instead opted for the risks and rewards of launching a new brand. The plan is that we will initially ride on the brand recognition of Big Bazaar, as we move ahead in time and Futurebazaar establishes itself independently, this association will be allowed to get weaker.
I do not agree with the contention that most online businesses are shadow operations of stronger offline brands, . Sify or Indiatimes are the only brands I can think of that have strong offline sister brands. Indiatimes may not be as big a brand as The Times of India, but thats merely because TOI has had a 100-year lead on it. Rediff, which is a spinoff from Rediffusion, has long since established its own separate online identity. Others, such as Landmark, do not have a separate brand online; its merely another channel.
What are the advantages of buying from a portal over shopping from a store
Retailers work on very low operating margins in any case, so there is not much scope for cost reduction. Price is a function, finally, of buying power. The bigger the quantities bought, the better the price. Large retailers will always enjoy a price advantage on the average. If a large retailer goes online, his buying power ensures that he has a sustainable cost advantage over other smaller online or offline businesses.
Futurebazaar will thus be competitive in Mumbai (where there are lots of large retailers) but cheap in Sahranpur (where the competition is a lot less). We will typically sell at prices that are the same as, or similar to, the best prices in the real world. This is true of all online retailers all over the world, except in the special case of books. Walmart.com or Target.com is no cheaper than the store, and a mobile on Amazon will probably sell for the same price as in a BestBuy store. That said, online does allow a better way to find the cheapest price on offer for a wide range of products. It is much more difficult to do such comparison shopping offline.
For many Indians, a purchase is often an opportunity for a family outing. How do you propose to meet these challenges at Futurebazaar
Online shopping can also be family centric. I bought a video camera online after showing my mother the details of the product on the screen. The nature of the interaction is different, and one does not replace the otherboth will exist in their own niches.
Touch and feel is another area where consumers are showing an interesting trend. Apparel is one of our largest selling categories online because there are many customers who already know what kind or quality of a branded shirt they are looking for. They dont need to feel it. Its true that many customers want touch and feel, but there are enough of those who are willing to trade it for other benefits, such as convenience or an attractive offer. Touch and feel is important in the absence of trust. With organised retail trust comes from the brand of the retailer or the manufacturer rather than the touch.
You offer manufacturers guarantee on every product, besides following a product return policy. Are such assurances important How many product return/refund requests have entertained since launch
The return policy is a customer service promise that the Future Group follows in all its formats as a way of ensuring customer satisfaction. Online, we offer a stronger version of thisyou can return the product even if it is not defective, without giving us a reason. Such a guarantee is common in the West. The objective is that ultimately, he or she should be happy with what was bought.
We have had a few cases where people have returned products to us because they did not like them. Sometimes high-value products are also returnedwe had a customer return a mobile phone worth Rs 19,000 because she found the phone too complex to use. Another customer returned a Rs 37,000 laptop because he found a higher-end model that he liked better (he bought that from us too, by the way). By value, the total returns of this kind are less than 1% of turnover.
Experts contend that the two main reasons why e-commerce has failed to fully take off in India are low Internet penetration and security concerns. How do you address these issues
Internet penetration is 4% of the population in India; which sounds small till someone tells you that organised retail in India is 6% of all retail. Would you say organised retail has failed to take off in India Percentages are meaninglessit is the numbers that matter. Thousands of crores of airline and rail tickets are being bought on the Internet in India today, overcoming both penetration and credit card concerns.
Broadly speaking, which are the categories that move faster on the net
I wouldnt like to make a very broad statement of what moves fast on the Internet. Some things we see are books, apparel, USB drives and mobile phones. But as we build range and good offers, nearly anything can move. In different promotions, we have sold sarees, food, cookware, cutlery, electronics, steam irons, microwaves, split air conditioners, and scores of other products. The fact is that almost anything can be hawked on the Net. The challenge is in delivering it.