Brick and mortar stores feel e-shop singe

The secret behind the low price by the online marts is that they buy stocks in bulk. Besides They have the advantage of gaining profits by selling some products exclusively

Hyderabad: Up against the aggressive marketing strategies and seemingly endless range of products offered by online shopping marts, the brick-and-mortar stores are on the edge as they fear a market washout this festive season.

While India’s e-commerce market, especially online shopping set to cross Rs 52,000 crore business this festive season, the retailers are struggling to keep pace with the online players – Flipkart, Amazon and Snapdeal etc, who offer numerous discounts while displaying wide range of products in their inventory.

Apart from giving discount, the online shopping sites are also offering other sops to lure the customers. It may be noted here that Amazon is offering its customers a chance to win one kilogramme gold every day.

The claims of the Flipkart that it had sold half a million mobile handsets in just about 10 hours on Wednesday as part of its ‘The Big Billion Days’ sale, gives an indication of the colossus business made by the online shopping marts.

“With products sold for prices much less than their actual retail price, the customers are invariably attracted to online shopping,” said Kailash Lakhyani, the president of the All India Mobile Retailers Association, and the owner of four retail outlets in Visakhapatnam.

Not only the business of 1.5 lakh mobile retailers in the country is at stake but also the livelihood of six to seven lakh employees who are working with the outlets is in danger due to the indifferent approach of the mobile companies, Kailash Lakhyani said.

The secret behind the low price offered by the online marts is that they buy the stocks in bulk from the mobile companies. Besides this, the online marts have the advantage of gaining profits by selling some products exclusively released for them.

Mobile companies like Xiaomi, Lenovo and others release some models which are not available in open market. The customers will have to cough up whatever the online marts charge.

“Although customers stand to gain with online players trying to outdo each other by offering discounts, there are several instances of counterfeit products being sold online besides the risks of facing e-transactions.

The customers also need to be careful whether the terminal and the website they are transacting on is secure or not,” Bolloju Venugopal, Hanamkonda Mobile Trade Association president, said.

Meanwhile, the retailers allege that local governments were losing tax revenue as the billing is done elsewhere in the country. Most of the online shopping marts are based in Bengaluru or Noida.

Following the protests and complaints by the mobile retailers in the state, the Telangana commercial tax department is reportedly sent notices to the online shopping marts to pay the VAT for the business they made in the state.

But online traders made it clear that they have nothing to do with it as they were already paying the tax at the source State where billing is done.

Mobile retailers, who observed bandh on September 25 across the state, are planning to demonstrate their protest to the Central government through a ‘postcard campaign’ to ensure a level-playing field to catch up with the online marketing.

By:Adepu Mahender