India is the growing e-commerce marketplace, where everyone is converging. A 400-million-strong aspiring middle class (with around 250 million Internet users) has several avenues to satisfy its hunger for goods and services. As this huge customer base gets used to e-shopping, the world’s e-tailers are making investments and strengthening infrastructure to take orders, deliveries and followup service. But as Amazon’s Jeff Bezos rushed to India with a $2 billion cheque, traditional retailers have some doubts about whether gross margins of e-tailers, who sell other people’s goods, will ever justify the hype of valuations and big ticket investments chasing the e-dream. Online retail revenue estimates vary from KPMG’s $13 billion and Assocham’s $16 billion.
While Amazon India places domestic e-commerce giant Flipkart in its crosshairs and takes on eBay for a share of the global pie, organised retail’s Kishore Biyani is intent on selling owned brands to increase margins and build a hybrid model of high-street shops and e-commerce. There are early days yet to say if e-commerce is a bubble or an exciting new commerce avatar of the old brick and mortar. E-tailers may find the going tough as bandwidth issues make the online shopping experience a mixed bag. The crystal ball, that predicts success for the hybrid model in the immediate future, also reveals that one day India’s online retail trade will burgeon to be somewhere in the region of $100 billion as people go online to beat such issues as inner-city traffic glitches and parking woes.
