Did you know that India is the fastest growing market for e-commerce? The e-commerce market in India is expected to hit $64 billion by 2021. In Asia Pacific, fashion and apparel tops the list followed by consumer electronics and computer hardware.  Among the fastest growing categories are grocery, beauty products, home appliances and furniture.The e-commerce market in India is poised for a tremendous growth. There are numerous small as well as big players vying for customers’ attention. When compared to Amazon, the world’s largest e-commerce player, corporate giants in India like Tata, Reliance and Birla made a late entry into the e-commerce market.

Online ventures from the corporate bigwigs

Among these three Indian corporates, the first one to enter the e-commerce market was the Aditya Birla Group with its fashion portal Abof. Founded in October 2015, Abof stands for ‘all about fashion’, and sells about 55 brands including the company’s own brands. The Birla Group owns one of India’s largest fashion retail chains with Pantaloons outlets. Brands like Allen Solly, Louis Philippe, Van Heusen, Peter England and People are fashion brands owned by the same group.

Reliance Retail forayed into e-commerce in April 2016 with the launch of AJIO, a fashion portal. Reliance SMART, another online venture from the same group lets you shop for groceries from the comforts of your home. Shop online for footwear from Footprints360.

The 148 year old Tata Group jumped on to the e-commerce bandwagon with TataCLiQ in May 2016. The conglomerate plans to get its share of young internet shoppers by selling CAMELS; which is certified authentic merchandise everybody loves. Croma, a 100% subsidiary of Tata Sons has a chain of electronic stores and an e-commerce portal that offers electronics and home appliances online. A big name like Microsoft strengthened its online presence in India by offering its products on Tata CLiQ.

What makes these latest entrants different?

The entry of Reliance, Tata and Birla Groups in the e-commerce market was slightly delayed. But what makes these companies different is that they follow a completely different marketing model when compared to other players in the market.

Edge over competitors

Most companies that have a strong online presence have started off small and then grown into giant e-commerce firms. Reliance, Tata and Birla Groups are established names with a strong industrial presence has decided to go online in order to mark their presence in the online shopping world. Their aim is to lessen the gap between the online and offline market. In order to stay different from the other stores, these firms do not woo customers with great discounts, instead they promise quality and brand value.

Effect on other e-commerce players

Names like Flipkart and Amazon have been ruling the e-commerce segment in India. They do not have any reason to fear the entry of Indian corporates. This is because they operate on entirely different strategies and can only bring positive changes to the functioning of e-commerce in India. Customers in India stand to gain, as the entry of new players means better prices and a large choice of products.

But what could turn the tables in favor of Indian corporates is the new foreign direct investment (FDI) policy. According to the policy, a single vendor may participate only in 25% of the overall sales in the marketplace.  This will affect Flipkart and Amazon as both of them have single vendors like WS Retail and Cloudtail India respectively which are biggest sellers on the platform.

With the brand value that the Indian corporates bring, they might gain an upper hand over other players in the market, in the years to come.

Phygital marketing model

The future of retail is to blend physical and digital retail in order to enhance customer experience. The Tata Group was the first to coin the term ‘phygital’ to define its e-commerce marketing strategy.  By going phygital, Tata Group allows its customers to order online but pick up products from a nearby store, or check out a product in a physical store and place an order online. Customers who buy online from Tata CLiQ who wish to return or exchange products, can do so at the physical stores of Westside or Croma.

The Tata Group has entered the fray by planning ahead for the next 20 years. They do not want to focus on discounts as a strategy as they feel it will not bring long term business. In order to drive customer satisfaction, Abof, part of the Aditya Birla Group offers on-spot exchange of apparel due to size issues and an on-spot alteration service in selected cities. Reliance Retail is not far behind as it tries to integrate ‘online-offline’ shopping to enhance customer experience.

The phygital model brings the reassurance of an in-store experience and the convenience of online shopping giving customers the best of both worlds. “The phygital model is the next big step in Indian e-Commerce, It will work really well in days to provided its implemented well. This will be a game changer specially with the logistic & infrastructure support these big corporates have” said Shahid Ali (Operations Head) at CouponzGuru (a coupons & deals aggregator in India).

The Indian corporates have finally arrived in the e-commerce market and are here to stay. What could help these three companies in the long run is their established presence in the telecom sector. The millions of subscribers that they have can be potential shoppers on their e-commerce sites as well. It would be right to say that the entry of Indian corporates in the e-commerce sector promises exciting times ahead for the Indian consumer.

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One response to “Entry of Indian Corporates in E-Commerce”

  1. G b kulkarni says:

    A good piece of information. In brief every aspect of ecommerve presented.
    G b kulkarni

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