Tough Economic Conditions – A Boon For E-tailing?

The economic conditions across the world are becoming harsh day-by-day and it is making it tougher for companies to increase their franchisee sales or shop sales but it is definitely making headway into their online E-tailing footprint.

This could be again confirmed with companies reporting impressive growth in their E-tailing businesses.

Nike reported  growth in their e-tailing venture in a time where even e-commerce business is headed southwards. Online retail sales in the UK are predicted to go up 15% in Q4 2008.

The E-tailing refers to direct retailing by a company of its own products.

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Why does it make sense for companies to expand their E-tailing footprint:

The main cost for a company in retailing business are floor space,human resources,and other floor maintenance cost but in E-tailing companies do not incur other severe cost rather than warehouse cost and transportation cost.

The investment required in E-tailing is very low and do not incur subsequent heavy investments and could be up in very short period of time.

The bargain hunting consumers can be brought forward with more discounts as the companies save huge cost in their operations.

The consumers today spend way too much time online and according to a survey 50% consumers do their research online and then go out to buy, the E-tailing could be just the way to connect with them and initiate action from their side. The company can showcase more products online and thus offer variety of options and can  part away with inventories easily by offering discounts.

The major benefits for consumers is that E-tailing saves them time and money as more discounts pour in plus they get to choose from wide variety of choices.

E-tailing scenario in india:

According to the Internet and Mobile Association of India (IAMAI) and IMRB report, the E-tailing market was worth Rs 850 crore for 2006-07 and went on to achieve 30% growth by registering a turnover of Rs 1,105 crore in 2007-08 and is expected to show impressive growth in future too.

It was just recently  when future group started E-tailing for their white labeled products.

Although E-tailing has lagged in india just like E-commerce but hopefully in future it would see a lot more actions as internet habit of indian online users are on a rise and low sales and higher overhead cost makes it tougher for companies to expand their retailing footprint in india.

2 Responses to “Tough Economic Conditions – A Boon For E-tailing?”

  1. February 2, 2009 at 10:48 pm #

    Nice post though what remains to be seen is how will e-tailing shape out in India. People are still wary about ordering online. So it would be interesting to observe whether e-tailing spreads out to many more categories than it is right now.

  2. February 3, 2009 at 2:15 pm #

    @chanakya yes you are right- to make e-tailing work first e-commerce has to be expanded and evolved…….but dont you think with many companies providing online benefits for payment it would definitely help to evolve e-commerce in a big way though economic tubulence may prove a dampner cos the banks would be issuing a lot less credits cards(credit) to applicants.

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