Wednesday, September 4, 2013

Indian Retail - Point & Counterpoint: Is market place led model sustainable for E Tailing?

E Tailing in India is still in its nascent stages and yet one sees massive advertisement campaigns which seems to be enabled thanks to the funding. Does the business support such spends and can the model be sustained in a viable manner is an obvious question.
While the competitive advantage for any Retailer is best derived through sourcing some of these E Tailers seem to be embracing the market place led model in the context of lower costs and quicker roll outs.
However, the concern in my mind as a Retailer is that they are not only compromising the sourcing advantage but also not taking into account an important element of the Indian market place. Retail density in India is amongst the highest and when a phone call can connect me to known stores why should a shopper go through the net, even assuming they are doing so through their mobile.
The only motivation for such a move would be to access products and categories which are not available nearby or easily. Which in turn means that any site which is based on market place led model might end up being a niche player.
Is it a sustainable game plan?
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