Etailers killing Retailers - Govt should act
Pumped with venture money they are distorting the whole system. If Reliance decides to put 20000 crores in its retail business and start selling 30% below mrp obviously its volumes will rise but all the small stores, even local grocery chains will be out of business. They do not have lasting power.
Flipkart, snapdeal are doing same thing. Govt needs to intervene according to me and ensure no one can sell below cost. more
Moreover, the e-commerce companies are not directly selling any products. What they do is on receiving a confirmed order, they pass on the order to a supplier having arrangements with them and dealing with that product, who in turn ship the parcel to the purchaser under the guarantee cover of the e-commerce company who earn commission from the seller. It is obvious that no traders can afford and will sell any products at loss. In fact the small retailers do their business on a profit of very high percentage and the purchasers do not have any choice in deciding their purchases.
Mr. Swapnil you have no reasons to worry. Let the Reliance and other multinational companies open their retail shops in India. We have no more than 20% of our populace who prefer to market their needs in these shops. The remaining 80% of the population will continue to remain with the petty shop keepers at least for another couple of decades. Let some of our people have merchandise of their own choice right from now!
Please note that no business will survive if it makes losses, they e.commerce companies are investing in customer acquisition via price, but finally they will also have to make money
The smaller shops have continued to survive by better customer connect
They have to innovate and provide more services than current, they could also act a partner for e.commerce like some are doing in the Kirana world
E.commerce companies have give consumer access to a large range and service at door step first and then comes the price element
Market and business will continue to evolve, this is just the beginning
Innovation and fast action is the name of the game