Ecommerce, Social

Offline or Online – what would the future be?

Bijou Kurien, President & CE, Lifestyle at Reliance Retail Ltd

Retail in India, though a very old industry, has seen rapid changes over the last 20 years. Circa 1992 – Shoppers Stop set up a modern department store with the intention of becoming a national retail chain. And over the last 20 years, many others have followed suit which has helped develop a modern retail industry which today contributes to approx 7% of India’s retail market. This does not take away from the many local retailers operating at a city level and many others who have progressed to a State or Regional level. While the South has pioneered this concept with the establishment and expansion of several apparel, food and jewellery retailers; the other regions have not been slow in catching up. Retail enterprise exists in India and it has not been the exclusive preserve of multinational retailers or domestic business houses. Which is why, despite the good intentions and best efforts of all modern retailers, the Industry has still not made sizeable headway and is a small contributor to India’s retail business but a large contributor to visibility.

Since retail distribution is expensive in India, multi-level and direct marketing companies have found the peer review and sale culture of India, a good opportunity to sell their wares. Many multinational direct marketing companies have created their own personal distribution systems and penetrated categories such as personal or home products. In the last 5 years, online retail has emerged as a vibrant channel of sale and many fashion, lifestyle, electronic e-commerce players have emerged. But despite their best efforts, their penetration remains less than 1% of India’s retail market.

So what does all this leave us with? Choice or Confusion?

As a consumer, our thought is what do I buy and from whom? Reflect on the shopping basket of the average Indian consumer. As per the NSSO survey 2012, 60% of the shopping basket is Food & Grocery (F&G). All other categories, with Apparel being the next largest at 8%, are in single digits. Reflect on our consumer. 70% of them (850 mn) live in villages and 30% in the 5200 cities and towns in India.  In terms of targeting, 450 cities (>1 lakh population) which contribute to approx 65% of Urban population would be priority. What we are thereby targeting is 20% of India’s population or 250 mn consumers. To whom, Food & Grocery is the single largest consumption need.

Having now re-defined the market, we are clear that these 250 mn consumers are most likely to be attracted by different channels for different categories. Since a large proportion of our population is vegetarian, the likelihood of them buying fresh fruits and vegetables from an e-commerce player is quite slim and the chances of a food & grocery e-commerce player creating a significant dent in this category would be limited. This however, does not take away from the opportunity to create scale with niche consumers in the F&G space. Hence, this category would continue to be dominated for a very long time by the millions of small, independent F&G retailers who dot the landscape of every city, town and village in this country.  Apparel, footwear, electronics, mobiles, books, music, movies and other such categories which are brand dominated and form defined would present an opportunity for penetration by modern retail and e-commerce players. Here again, apparel and footwear are touch & feel categories where self trial and peer review are important, and only those brands/products which are well defined in sizing and fit or where fit can be sacrificed for price/choice, do offer an opportunity for being sold on an e-commerce platform.

As a consumer, the options may seem like many but in reality are quite limited, on account of access, purchase lead times, choice and shopping basket size. Would I choose a 3% saving if I have to wait 2 days for delivery? Would I travel distances for a mere 5% saving in my shopping basket of Rs.1000? In a brand undifferentiated market, what would my shopping behaviour be? These are the points we need to ponder on when we consider the question – Online or Off-line, what would the future be?

Bijou has about 31 years of experience in Indian Industry and has been closely associated with marquee brands in the Fast moving consumer products and retail industry such as Hindustan Unilever Limited, Titan Industries Limited. He helped build powerful brands in the Watch and Jewellery Industry like Titan, Fastrack, Sonata, Tanishq. He joined Reliance Industries in their newly created Retail division and heads the Lifestyle vertical in this retail initiative. His association with the development of Indian retail is over 25 years. Bijou is a prolific speaker on behavioral insights and retail. Bijou is Chairman of the FICCI National Retail Committee, member of the CII National Retail Committee and on the Advisory Board and Grand Jury of the World Retail Congress.

Meet Bijou Kurien at Internet Retail Expo 2013

Have ideas to share? Submit a post on iamwire


  1. 1

    Dear Mr. Bijou,

    India has moved on from fixed line to mobile in a very short span.This was not the case with US and UK.There is new generation who have not even seen a land line phone.I think mobile will revolutionize the online retail.It will grow very fast compared to the offline retail.

  2. 2
  3. 3

    It is a large enough market for both on and offline ….one only has to look at the developed markets outside and can see how both have co existed .

  4. 4

    How about another point of view how about if one needs to trave 100 kms over to find a decent mall that houses Forever 21 or a pair of jeans that reads calvin klein.

    What if the prices vary upto 20 percent online vs offline

    How about providing options to over 300,000 workforce with disposble income in Mumbai alone that works the graveyard shift

    How about a TRUE omni channel where in online facilitates offlines sales revenue and vice versa.

    How about bypassing queues at POS, or cutting down those 30 minutes just to find a parking Slot

    How about spending more time with your families and kids rather than trying to figure out from which corner to invade to get your brinjals or lady fingers.

    How about not cutting loose when the UPC at the POS does not scan 🙂 and thats an additional 10 minutes….

    How about waiting for your bus and ordering online and the grocerries reaching home before you yourself do.

    How about conveniently ordering pampers on mobile phones in the ease of your air conditioned cars or while watching tv and saving 10 percent too…

    How about trying 1000 different designs from 380 different vendors from the comfort of your homes or offices

    How about waking up in the middle of night and ordering “those” sunglasses that you would need a week from now to impress that GOA sun

    How about taking your wife out on a romantic dinner rather than carrying all those bags on a weekend and yawning / bickering every now and then

    How about NOT being loyal to a brand
    How about doing research and then spending your moolah
    How about looking at competition and their price and comparing
    How about taking an informed desicion based on what your peers expereinced

    How about reaching out
    How about being consistent
    How about developing a backbone that supports all possible touchpoints/channels that a customer uses
    How about listening to your customers
    How about ensuring they have ease of access
    How about knowing your customer
    How about treating online as a growth vehicle for your business (more so if you are a small, mid-size retailer)
    If a Buffalo in India can be sold on eBay .. a ghost of a grandfather in the US a space on the ARM for tattoo advertising a brand …..what cannot …

    Happy Selling did I add online ….

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>