Bricks v/s Computers

A change in the pecking order in India’s retail sector is in the offing. The hegemony of brick-and-mortar retail companies, from big brands to small stores, is being crushed slowly by online retailers and market dynamics are changing. The latter has been enjoying inexhaustible access to funds of national and international private equity firms and high net-worth individuals, especially from the start of this decade. They have scaled up their operation with these funds received and pose a serious threat to the survival of traditional retail industry, which had a free run till recently. Lull in sales and declining footfalls during festive season are ringing alarm bell in the minds of conventional retailers and suddenly, the poster boys of post-license raj reforms look at a bleak future.

Nearly ten years ago, when organized retailers with deep pockets pitched aggressively to grab market share from small shops in major urban centres, hues and cries were made by small traders’ associations. Now, in 2014, stores of these retail giants and small shops complement each other and enjoy patronage of a set of loyal clients. Will the emergence of online retail have a similar story, one of complement and coexistence, to tell in 2025?

The sentiments among brick-and-mortar retailers aren’t upbeat and the traders have sought the intervention of Ministry of Commerce to rein in their online adversaries. They accuse online retailers of indulging in predatory pricing and breaching competition laws. Not just the small and medium-sized retailers who are up in arms with online retail. Even big brands too have joined the band wagon. It will really be an interesting duel to watch.

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