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Online Shopping Fuels Virtual Retail Boom In India

posted 10 Apr 2013, 07:49 by Mpelembe   [ updated 10 Apr 2013, 07:50 ]

A surge in online shopping is weaning Indian customers away from their traditional love of shopping in the buzzing bazaars, fuelling a boom in budding business growing at a staggering pace.

PATAUDIHARYANAINDIA  (REUTERS) - Indian shoppers are increasingly moving away from crowded markets to buy everything online - from electronic gadgets to cameras, from cosmetics to shoes, fuelling a boom in a burgeoing business which is growing at a staggering pace.

Sitting in the comfort of their homes and offices, Indians are increasingly taking up the option of online shopping, a welcome alternative to the heat and dust of shopping outside in the crowded bazaars.

According to a recent study by eBay, Asia's third biggest economy with a huge middle class of over 300 million offers huge growth potential for the e-commerce industry which began about five years ago and is expected to grow to over $5 billion by 2015 from its current level of $800 million.

Most industry players say the growth for the next few years would be exponential -- in multiples and not in percentages.

At one of India's leading online shopping portal in the lifestyle segment, offers nearly 1,000 brands and over 50,000 products - and the growth has been phenomenal.

Launched in early 2012, the website started luring the Indian consumers with a range of options across categories such as shoes, apparel, bags, accessories, fragrances, sports-wear, toys and more.

Co-founder and managing director of,Praveen Sinha said it had been a fascinating journey with the portal generating about 100 orders a day in its initial month to over a million hits a day now.

"When we started like one and a half years back we had less than I would say 100 orders per day kind of a transaction volume, let's say early year of 2012 but today we are the most searched website even higher than consumer durable products etc," said Sinha.

But, in order to find the holy grail of online shopping, they had to work their way through the maze ofIndia's complicated infrastructure, set up supply chain systems, order tracking facilities as well as overcome an inherent distrust of online monetary transactions by devising new modes of payment such as cash-on-delivery and replacement guarantee schemes.

Online shopping has opened up huge opportunities for millions of Indians in fields ranging from manufacturing to logistics, computer operations and several others.

Several traditional retailers and suppliers have also jumped onto the online bandwagon, increasing their visibility and expanding their businesses to far flung corners of the country.

One such success story is of Pious Fashion Pvt. Ltd, a leading shoe company with eight in-house shoe brands.

The company came into being in 2004 and its entry into e-commerce business coincided with the advent of online shopping in India in 2008.

The shoe retailer, with brick and mortar shops in dozens of cities across India, suddenly found a platform to reach out to a huge untapped market and has seen the rise in online sales far outstripping the business increase from its traditional stores.

Arun Vajpayee, Director at Pious Fashion, said that online shopping was contributing about 40 percent to their total sales and expected the trend to continue in the coming years.

"I am very happy that in five years span we have got a tremendous success in online performance and right now we have got presence in around 22 online portals and that is contributing huge. I mean, we are somewhere 30 to 40 percent of our total business contribution is from e-commerce portals. Where it used to be 100 percent offline only," said Vajpayee.

Easy access to internet in smaller towns and cities across India and cheaper gadgets, including tablets and other mobile devices, has contributed significantly to the rapid pace of Indian e-commerce and spurred more and more players to enter into the segment.

However, the spike in online trade is hurting the shopkeepers in the traditional Indian bazaars who are complaining that online portals are eating into their business.

Arif Mehboob, a fabric seller at a popular New Delhi market said: "Ever since online shopping has come into existence people do their shopping online only, they find good deals and purchase them. No one comes here anymore, and this has affected the traditional market quite a lot."

But, not everyone is yet convinced of the merits of shopping online.

The sprawling malls with attractive displays still attract their share of die-hard customers who prefer to touch and feel their products before opening the wallets.

"Yeah, absolutely, for me I have to come and try otherwise online shopping you know, you never know what kind of leather it is, its soft or hard I can't make out, for me it's not a (an option)," said Jaswinder Singh, a customer at a modern shoe store.

The rising popularity of e-commerce business could also be partly owed to the shopaholic office-goers who are addicted to their computer screens.

Mimansa Shekhar, a regular online shopper, said her busy work schedule did not offer her the luxury of visiting markets and she preferred the convenience of online shopping without having to worry about the long traffic jams and parking hassles.

"For people like us who are into professions which require to be on the toes 24 7 and we don't get time for ourselves so I think this is a good option where we can just click on a page, click on a button and then you get so many options to shop and you get it delivered at your doorstep. Secondly the deals that we get, the discounts that we get, its really good, I mean why not? Rather than missing out on a sale season just go and click on a button and you get the deals," said Mimansa Shekhar, an office goer and online shopping enthusiast.

So it seems like the gentle breeze of online shopping is turning into a tornado that could storm the world of brick and mortar shops in India.