Value Addition, Customisation To Tackle E-Commerce Dominance
While stringent regulations and massive delays in the clearance of reform bills like the Goods and Services Tax(GST) has turned out to be a migraine for the channel industry, the sector is also battling the growing dominance of e-commerce portals which are eating into their sales margins via offering the same products at bulky discounts.
” Channel industry has been significantly impacted with the advent of e-commerce portals as consumers now prefer to buy IT peripherals online, available at a significantly lower price than reaching out to the nearest retailer,” says Dr M Arumugam, Managing Director, Broadline Technologies Limited.
Aligning with the thoughts of Dr Arumugam, Jayesh Mehta, Managing Director, Future Business Tech India Private limited states that channel industry should now accept the fact that online market space will continue to grow and share its profit margins.
”The e-commerce sector will continue to affect the sales of the channel industry as the end consumers are saving on both their time and money to avail a product online,” says Mehta.
The e-commerce industry in India is expected to surpass the $100 billion mark by the year 2020, owing to hefty discounts and offers, ease of getting your desirable product delivered to your doorstep and the rising penetration of mobile internet, according to US investment banking firm Goldman Sachs.
And while tougher norms for e-commerce to ensure the profit margins of channel partners and retailers was a long term demand of the industry from the Government of India, a green signal to Foreign Direct Investment(FDI) by as much as 100 percent in B2B domain as well as permitting single brand retailers to sell their offerings online further worsened the situation.
”The government too is betting big on online retailing, owing to initiatives like Digital India Plan which aims at provide last mile internet connectivity to citizens of the country,” adds Dr Arumugam
So what’s the ideal solution for a viable co-existence of both the channel industry as well as the online retailers?
”Value addition as well as ensuring customized offerings to consumers is something which can help pull the customers back to retailers. While online portals only offer peripherals at a discounted price, ensuring a complete package to a customer which meets his end to end requirements can help partners retain their customers,” adds Dr Arumugam.
Industry experts also believe that offering an in depth consultancy to consumers as to help them find the best product which aligns with best of their requirements is also the need of the hour.
”Ensuring a comprehensive guiding to a customer about the products with a significant value addition can convince a consumer to pay more for a product than availing it online,”adds Mehta