PANJIM: The summer is upon us and so is its constant companion, humidity. The search for a cool spot is but a continuous affair. That may with some luck be found but for retailers in the white goods industry finding that sweet spot. Business has been depressed for a while with market sentiments not exactly chirpy. To make matter worse, the consumer is Goa like in many other parts of the country is increasingly going online to purchase products as diverse as casual wear to white goods.
Felipe Alvares of Prime Electronics a retail outlet in Panjim was forthright in his views on the situation. He said “The on ground business has been badly hit. The pricing online is so much more different. The discounts are huge and the difference in price is glaring. We cannot compete with these discounts.” Certain categories he said like washing machines and mobile phones had migrated online. Felipe said “It is not unusual for a youngster to walk into our store, check the mobile phones designs and go online and purchase them at a Rs 5000 odd discount. How do we compete with that?”
John of Johnlyn Enterprises said the day of doom was not far away. Business he said was down by approximately 75% and the sale of LED TV had almost ended at his store. He said “Families come over, decide on a model check the price with us and then go online and buy it cheaper. They save as much as Rs 35,000 in that transaction. We warn them of the dangers inherent like the absence of after sales service but it does not seem to have any effect. In fact they turn around and tell us that the company had promised to provide after sales service. Others feel that a television of this sophistication at this online price would pay its worth over a two year frame and it would be ok with them if they had to buy a new system. How does one answer that one.”
Companies he said were also providing different models to sub dealers and dealers with different pricing. Another retailer in the market confirmed this and said some of the bug retail chains in Mumbai had signed deals where the multinational companies would create a special models which were not sold in other chains. He was categorical that if the situation continued along these lines he would have to shut shop and look at other sectors to conduct business.
Other retailers said the online business was decimating their business. Sanjay the Panjim manager of the Shetye Sales said business had taken a hit. He said “it could be said our business is hit by around 10-15%. It is struggle when it comes to LED sets. The difference is price is glaring. If we succeed it is on the basis of the promise of excellent after sales service otherwise, what can we say?”
If there is some solace it is that the sale of refrigerators and air conditioners have not migrated online. Felipe said this was due to the fact the consumer wanted to experience the coolness of the model they intended to buy and more importantly, personnel were needed to install these appliances which were not done by companies operating online. Perhaps what could also help the retail trade is the realisation by the companies that these discounts which are funded by the online companies cannot perhaps continue for long. The bigger brands he said were also beginning to rationalise the discounts with the difference on and off line not so glaring.
The value of business conducted online in Goa is unknown. None of the companies were willing to provide information. The online business in the country however is booming. The growth has been dramatic.
India’s e-commerce market was worth about $3.9 billion in 2009, it went up to $12.6 billion in 2013. In 2013, the e-retail segment was worth US $2.3 billion. 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.
By 2020, India is expected to generate $100 billion online retail revenue out of which $35 billion will be through fashion e-commerce. Online apparel sales are set to grow four times in coming years.
According to research firm eMarketer Inc, India was one of the fastest-growing retail e-commerce markets in the world in 2015, growing 129.5% year over year to $14.0 billion in 2015 from $6.10 billion in 2014. That represented only 1.7% of India’s $818.33 billion retail market, according to eMarketer data. But eMarketer projects that the portion of retail sales transacted on the web will jump to 4.8% by 2019 totalling $68.47 billion.
That is the large pie that is being competed for in this country. For retailers in Goa , as the summer sun beats down , they will hope and pray the sale of air conditioners stay healthy and offline for several years
to come.
