2015 had Snapdeal and Flipkart dragging Birlas and Ambanis in the e-commerce space
Bengaluru, India | Red Newswire | Dec 26, 04:58 PM IST
2015 had seen many etail wars. The David and Goliath of the e-commerce market i.e., the Snapdeal and Flipkart are forcing Birlas and Ambanis to join the competition.
What we are going to see next is a knockout round both in online and offline retail world. And as they say the fittest will survive, the weaker ones are being forced to pull down their shutters or shake hands with the stronger ones. A bigger consolidation is evitable in 2016!
This year has also seen merger of global players like H&Ms and Brick and mortar shops, Amazon and online markets, Future group and Bharti Enterprises and so on.
The estimates have it that the etail sector will grow by 13% from USD 560 billion this year to USD 1.3 trillion by 2020. However, the availability of space in the sector will prove to be a major challenge.
Kumar Rajagopala, CEO of Retailers Association of India says, “Year 2015 was a year of challenges and opportunities. Biggest challenge for retailers was unavailability of good retail space due to fall in number of new malls. This also means that traditional retailers will continue to be important part of retail in India.”
According to Rajagopalan, the key factors for the retail sector in 2016 will be mobile-based electronic payment systems, GST and infrastructure development.
He added, “The other main expectation in 2016 is the announcement of retail policy by various states, including Andhra Pradesh, Telangana, Maharashtra and Gujarat. E-commerce was also a big opportunity. Most retailers either began selling their product themselves or through a tie-up with e-commerce players.”
Around 60% of the Brick and Mortar retailers are developing their e-com business. This trend is surely going to redefine the shopping experience of the customers.
Mahindra Retail also launched Mom & Me and acquired Babyoye.com earlier this year. Mahindra later integrated Mom & Me into Babyoye.
Kumar Mangalam Birla, Chairman of Aditya Birla Group says, “The e-commerce sector is a sunrise sector from an investment point of view… We plan to stay focused on seeding and growing specific businesses in areas where we have specific strengths which we can play on extensively. We see fashion e-commerce as one such space.”
The e-commerce sector also got a huge boost from the government with FDI for B2C segment. But, on the other side, these players are being questioned about the huge discounts they are offering.
Above all, the merger of the year title goes to Bharti Retail and Future Group which was a Rs. 750 crore stock deal.
As for the newcomers, Swedish fashion retailer H&M was a huge hit on its first launch. Now it plans to launch 50 more stores. Another Swedish IKEA might be launching in Hyderabad and 2 other stores after that.
Source: ET Bureau