When Keith Sequeira decided to buy the latest Samsung tablet, he did not walk down to the white goods store at the corner. He instead went online and ordered it. And like many other users of online services paid the bearer of the phone instead of doing so online. Keith is just one of a large number of Indians and specifically Goans who conduct these transactions everyday.
The ease of buying online, anything and everything, has caught the attention of the State. Certain product categories have migrated online. Today it is the rare punter who walks into a white goods shop and purchases a television set or a smart phone. Yes, they might walk into the shop to physically check the model and the price. They will then go home and purchase the mobile phone or television set online, taking advantage of the substantial discounts available.
The situation is so bad that several outlets intend to either shut or move into other businesses. The only categories that have not migrated online is the refrigerator and air conditioner for the simple reason these products are usually inspected by the company as well as the service executive who will help them in times of need.
The growth in e commerce has been helped by the increasing popularity of smart phones. It is estimated that online retail will be a $18-billion industry in India in 2018 and e-commerce logistics will be a $2-billion industry in 2019. This number will only grow when online retail becomes, according to a Goldman Sachs report, a $220 billion market in 2030.
It is expected the number of Internet users in India will double to 650 million from the current 350 million by 2020. Presently, there are over 100 million online shoppers, which is also expected to grow exponentially.
In India, cash on delivery is the most preferred payment method, accumulating 75% of the e-retail activities. Demand for international consumer products is growing much faster than in-country supply from authorised distributors and e-commerce offerings. About 70% of India’s e-commerce market is travel related.
According to Google India, there were 35 million online shoppers in India in 2014 Q1 and is expected to cross 100 million mark by end of year 2016. CAGR vis-à-vis a global growth rate of 8–10%. Electronics and Apparel are the biggest categories in terms of sales.
According to a study conducted by the Internet and Mobile Association of India, the e-commerce sector is estimated to reach Rs 2,11,005 by December 2016. The study also stated that online travel accounts for 61% of the e-commerce market. Anecdotal evidence seem to suggest that the purchase of air tickets, garments, mobile phones and books comprise a large percentage of the purchases in Goa.
National and international e-commerce platforms are popular in the State but now local businessmen are making preparations to create platforms to augment their brick and mortar businesses.
Kirit Maganlal of Magsons the retail chain is making preparations for such a move. Speaking to the Herald he said it was a logical migration into the e-commerce platform. E-commerce in grocery had just commenced in the country and it made sense to be the first n Goa in that space. He expects the initiative to take off in the next couple of months. Kirit spoke to all the big players in the country like Pepper tap, Local Baniya and a couple of others. Most of them gave a thumps down to the initiative arguing that there was not much density in the State though one of the large players expressed their interest in tying up with Kirit. He intends to develop his own logistics network to support this venture.
Kirit said “I do not want to serve a limited audience. We should be able to serve anyone with a smart phone in Canacona, Verna or even Pernem. We will achieve this goal in the next six months. We have 6 outlets in the north and 6 in the south. Our drawback is our absence in the interior of Goa. We intend to have the hub and spoke model there where we will have a store present there to be our representative. The IT infra will be provided by our partners.”
Kirit said the company intended to deliver orders within two hours. Payment can be made at delivery by cash, Sodexho coupons, paytm etc. Kirit says he is targeting 10% of his annual sales by e-commerce which could be around Rs 5 to 6 crore. He intends to have an app, web based and telephone for orders. The core focus of the business was on fresh produce fruits and vegetables. Meats and fish and regular pre packed groceries. The market he said would continue to grow and he intended to be a major part of that future.
Another player in the State who did not want to come on record due to business reasons said business grew every month but breakeven was not possible. Goa, he said was lukewarm with a small population and an even tinier market for the services he was providing. Mothers with kids were a big segment of his client base. Parents living in Goa with kids working abroad were another segment with their kids transferring the funds to the company’s account. Despite a monthly growth, losses were building up and he could not sustain the business. Presently under renovation, he is off the market. There was potential in the Goan market, he said but not now.
The e-commerce market is expected to grow and the rush is on to make the most of it. The Goan market may not make you a billionaire but it will certainly make you a multi millionaire. In that lies the attraction of this small market.
