Saturday, September 30, 2023

Are physical stores really dying because of e-commerce?


Why are people increasingly inclining toward e-commerce instead of physical stores? How is it bringing a massive shift in India’s traditional retail business model?

Even though “E-commerce” is providing businesses with new doors of opportunity, it is also giving offline local stores cause for concern. Whether e-commerce will destroy the conventional manner of company conduct is one of the most perplexing areas of discussion among offline businesses. You would undoubtedly believe that technology is harming conventional enterprises if you look at the statistics of the e-commerce market’s expansion over the past ten years.

India’s evolution of e-commerce:

Before the dot com boom in India in the year 2000 allowed for the emergence of online commerce, the industrialised countries had already been out in front. India’s first experience with e-commerce came in 2002 when the Indian government opened a website for online train ticket purchases through IRCTC. The general public, who would no longer have to wait in huge lines and lose time, would benefit most from this, which would also lighten the load on ticket brokers as a whole.

Although Rediff Shopping and even eBay had been offering retail sales online since the year 2000, Flipkart’s extremely significant discounts on their website effectively revived online shopping in India. Since then, many more businesses have joined the online bandwagon in an effort to share in the riches generated by e-commerce, including Amazon and many more.

Due to its enormous population as well as the rising number of internet and smartphone users, India has a lot of promise for e-commerce. There appears to be a direct correlation between the rise in internet users and online sales.

Why do you think e-commerce is gaining ground in the marketplace?

  • People enjoy being treated like royalty, whether that be as a luxury or a sign of laziness. Since the introduction of e-commerce, customers have benefited greatly, and their buying habits have changed over time. The following are the leading causes of the shifting preference:
  • Customers now have more freedom to shop for the most outstanding products from any location in the world.
  • Being able to shop whenever suits a customer’s needs makes it easier for them.
  • Saves time spent waiting in lines
  • There are many possibilities to compare between thanks to a vast array of product comparisons.
  • Simple to compare product costs and order the most advantageous deal.

Why are businesses turning into e-commerce?

  • One of the leading causes for businesses to start looking for new ways to meet customer demands is altered shopping patterns. E-commerce has proven advantageous for firms because: transactions are no longer restricted by regional boundaries. As a result, there are greater chances for development.
  • Businesses found it simpler to market and publicise their just launched store thanks to the pay-per-click (PPC) system. You no longer have to wait years for achievement like in the past. It draws customers in by offering discounts and coupons.
  • Dealing with customers’ difficulties and closing the sale has become simpler.

India’s present scenario:

With the ability to place orders and pay upon delivery, online buying was once quite simple. There were also not many options available. The way that online purchasing functions in India today has undergone a gradual but significant change.

Indian consumers have embraced online shopping to a great extent thanks to appealing websites, user-friendly interfaces, numerous online stores with a wide variety of options and current fashion, simple and highly secure online payment methods, and of course, the freedom to select the size, colour, and even the best price for a favourite item.

Additionally, the opportunity to receive discounts all year long, coupons, earning referral and reward points, a 30-day return policy, and delivery times of less than a day or a week have all contributed significantly to the development of e-commerce in India.

The offline stores have been adversely impacted by the online shopping mania. Customers undoubtedly prefer online shopping due to the lower prices and safe delivery alternatives. Indian consumers have evolved into savvy buyers, preferring to conduct extensive research before discovering the best offers and pricing for the products they wish to purchase.


Naturally, offline stores have begun complaining about the cheap rates offered online. Since India’s e-commerce regulations have not yet been established, offline retailers have asked the government to step in and stop their price war with online retailers. Due to aggressive pricing practices by online businesses and the fact that internet retailers are exempt from paying VAT, there is growing resentment among physical stores.

Even luxury and premium brands are beginning to feel the pressure of their products being sold online for less, which lowers the value of their brands. Some companies, like Lenovo, Nikon, Toshiba, and Canon, have warned customers that buying their items online would void the warranty; these are just a few of the severe measures offline merchants have taken to combat the sale of their products online.

The natural tendency of Indian consumers to “touch and feel” items before making a purchase – who still struggle with internet shopping—seems to be capitalised on by industry behemoths, as does the rising tide of foreign investments in the retail sector.

So let’s examine what the actual distinction between traditional retail and e-commerce is in India.

E-commerce versus India’s traditional retail model:

  • When compared to traditional stores, which may not always have the needed items in stock or may require the customer to wait before purchasing products from the offline store, e-commerce retailers offer a wider portfolio of products, a straightforward purchasing experience, and a significantly higher level of comfort and convenience. This has allowed them to significantly benefit from the relatively fragmented nature of India’s physical retail institutions along their growth path.
  • The sales assistant who follows you around in a store is identical to the ‘retargeting’ that occurs online when the advertising follows you after you visit a dealer site. These similarities to brick-and-mortar stores are similarly bothersome. Physical stores might not be able to exhibit a wide variety of products due to storage or other limitations, while online retailers are free to do so, even for items that are not even “in stock.” That is unquestionably a benefit for India’s e-commerce retail model.
  • Online retailers provide such discounts that the Indian consumer simply cannot reject in an effort to attract more clients. Pricing may be done through in-store promotions or direct discounts. Customers often touch and feel products first at a retail location before buying them online when the prices online appear to be significantly lower than the physical retailers. This phenomenon is known as “showrooming,” which offline retailers have now started to take note of and are obviously not happy with.
  • Online and brick-and-mortar merchants have invested years in developing their brands and fan bases. E-commerce retailers are focusing more and more on customer experience differentiators, such as shorter delivery timelines, reduced (or entirely eliminated) delivery prices, doorstep delivery, a wider variety of payment methods, and so on, as products and price points gradually move towards a level of approximate parity.

Despite easy accessibility through e-commerce, local retailers will not be wiped off entirely by the impact of E-commerce for the following reasons:

  • The conventional shopping pattern is still recognised for the following, even though it has evolved over time: The buyer’s proximity to the retail establishment gives them a choice to touch and feel the merchandise.
  • The reliability aspect for customers is the one-on-one support provided by vendors while they are making purchases.
  • In contrast to online retailers, physical stores continue to represent trust for some shoppers.
  • Cyber frauds and internet scams are not prevalent in brick-and-mortar establishments. Customers who haven’t switched to digital payments will therefore find it gratifying.
  • Since the internet is not used for buying, personal information is secure.

In conclusion, we can argue that eCommerce is unquestionably outpacing more established commercial methods. However, brick-and-mortar retailers won’t disappear entirely in any case. If you run a physical store, your company’s prospects of surviving in the marketplace entirely depend on your industry. The hybrid model is what eCommerce analysts suggest as the industry’s future. where retail will operate as a single, integrated business, offline and online, your traditional stores can benefit significantly from an omnichannel company presence, which will also increase your reach.

Also Read: Global economy: How headwinds gather force stoking fear of recession

(Purbasha Palit is a student of Journalism and Mass Communication from Amity University.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


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