As per his recent comment in ET, Kishore Biyani, founder CEO, Future Group , said “Online selling, the way venture funded start-ups are doing it, is a gross margin negative business and not sustainable. I don’t see ourselves competing with online sellers as both models — online and offline — will converge. Not everything will be sold only online or only offline.” he emhasised that online and offline will converge and omni channel strategy shall lead and indicated that Future Group’s omni channel plans will be out in September.
Image Source: Business Week
A somewhat similar opinion was shared by Ajit Joshi,CEO & MD at Infiniti Retail Limited, who agreed that there are some products that may not be sold online, and favoured omni channel strategy for Retail.
Shift in Online Retail Leadership
Brands which initially focussed on building their own websites, are moving towards marketplaces so that they are present everywhere the customer is. Offline retailers going online is a common phenomenon, and the reverse is happening too.
Key Drivers of Change
- Lower Margins
- High Operation Cost
- High Supply Chain Costs
- Continued Investment need to bridge cash flow gap
- Higher control on margins
- High Control on Supply Chain
- Surplus Cash flow to meet ongoing cash requirements
- Increasing Consumer Demand for Omni Channel Experience
- Established legacy trust of consumers
Probably not, but only a few of the major aggregators shall survive. A large share of market shall shift toward omni channel retail, where the pricing is competitive and its a fair game for both the sellers and the buyers.