'Flipkart, Snapdeal, Amazon way behind brick 'n mortar retailers despite discounts'

Written by Subhash Narayan | Updated: Oct 14 2014, 16:14pm hrs
Online retailersOnline retailers such as Flipkart, Snapdeal, Amazon, others are unlikely to eat into the traditional retailers businesses, says Technopak.
Online retailers such as Flipkart, Snapdeal, Amazon, others are unlikely to eat into the traditional retailers businesses by their frequent discounting and jaw dropping offers. According to Technopak, country's leading retail and advisory firm, online retail sales still account for less than 10% of the total retail spending of $535 billion in the country, and this situation would remain similar or even see a fall in overall share of online retailers by 2020 when total retail would grow to $1 trillion.

The fear that online retailers would eat into the tradition sale channels is completely unfounded. The retail market in the country is huge and would grow at average nominal rate of close to 13% over next few years giving ample opportunity to all to have a share but online would still remain small, Arvind Singhal, chairman of Technopak told FeOnline.

He agreed that some categories such as mobile phones and a few electronic products could see emergence of new business model where online sale could play a dominant role but for vast majority of segments, retail route would remain more or less the same.

We should look at 16 million retailers nationally and not just make impact on say 10,000 mobile phone retailers as a representative figure, Singhal said.

According to Technopak, while euphoria may have been generated with the kind of sale being generated by etailers, actual numbers presented at Registrar of Companies (RoC) shows that companies' turnover remain at few hundred crores with only Flipkart showing numbers that run into thousand crores.

While the talk of online players wiping out offline retailers is baseless, the current market conditions could provide cheaper and better products to consumers, whichever route he/she prefers to take, Singhal said.

As for 2015, Technopak believes that while the retail market will expand by $65 billion, online retailers share would increase by a mere $ 2-3 billion. The case would be same even this year even with Flipkart's Big Billion day Sale and Diwali Dhamaka Sale of Amazon.