Home Shopping

They said that Internet penetration was not enough in India and people are afraid to pay online, so shopping from the net is not a viable option.
So now we have the concept of shopping channels pioneered by Network 18, Star etc. They are 24 hour channels which will have live feed and people can buy from their TV – No problem of penetration as all houses especially in tier 2, 3 cities(the primary target market as these cities don’t have the big brands which people aspire for) have TV’s and housewives don’t have to learn to operate it. Considering the size of modern retail being estimated at $200 bn by 2012, home shopping has tremendous potential.
But it will have to overcome some of the basic Indian buying behavior problems or in other words “educate the customer”

1. Establishing Trust
The problem with internet shopping has been establishing trust. No doubt with brand names like Star and Network 18, they have the brand image to push things.

2. Quality of ads on the channel
When you say home shopping or teleshopping, what comes to mind are those silly ads which has foreigners with 6 pack bodies, a ridiculous hindi voiceover (which has been a topic to mimic in Laughter Challenge), selling some health equipment. Who buys those products seeing those ads?

3. Buying Mentality
Even if we have to buy simple things like utensils, we have a habit of going to 3 – 4 shops, checking them out by touching and feeling, bargaining and then buying it. Nothing of that sort is possible while buying from a TV. And may be is the greatest challenge in e-commerce.

4. Early adopters
No doubt, just like any new technology, this channel needs to have its early adopters – who would adopt the channel and promote it by talking about it. Are these early adopters going to come in the form of tier-2, tier-3 housewives or youngsters from metro cities?

Organised Retail

The retail is booming in India. The present share of organized retail is hardly 4% of the GDP and is all set to boom with multiple malls mushrooming everywhere. It is expected that the organized retail will grow at 21% by 2015 where food, grocery and general merchandise being the leading category.

But the big question is that can it give serious competition to the 12 million retail outlets in India.

One of our Profs shared a rather interesting perspective. There is a limit to the extent organized retail can grow. This is because there are many positives of a small mom and pop store. First is the personal touch. In most of the cases, the next door kiryana wala knows you by face and over the period of time knows your choice. He needs no sophisticated IT systems to know this and that you cannot get at a big store – no matter of how much you improve the service delivery levels.

Another noticeable difference is the provision of credit. This derives from the above point only. Almost on each visit to my kiryana dukaan, I can see him giving off stuff without cash and writing in his small booklet about it which he collects at the end of a specific period. Yes, there are credit cards today but what about a daily wage earner. If a person living his life on daily earnings falls ill for a couple of days, he will have nothing to eat for those 2 days if our credit giving neighborhood retailer is not there.

There are scores of positives in favor of large, organized malls. As a consumer there are many schemes and offers whenever I go to a Big Bazaar but again ‘I’ am not India. 77% of Retail market still is in the 5500 towns and 6 lakh villages of India and the figure will be still around 60% in 2025. And as managers we need to know if someone is comfortable going to a big mall for small items or if there is a tendency of ‘impulse purchases’ (large retailers thrive on that) in smaller towns or if people prefer fruits and vegetables in a AC hall or from a cart which comes by every morning. 

*Numbers from a report by Tata Strategic Management Group