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Is E-commerce, the next big fish which could eat the prevalent retail segment?

There was a prevalence of barter system in the early 19th century where in there was an exchange of products and services with each other according to their needs and requirements. This was not only difficult but also led to instabilities. Later Adam Smith the economist summarized the difficulties associated with this system and explained the significance of money.


Ever since people have doing monetary transactions, however who knew that one day a seller and a buyer would not have to meet physically and still obtain what they require. Money in the form of coins and paper notes would be replaced by online banking.

Yes I am talking about E-commerce which is also known as electronic commerce, is the trading of exchange in products or services electronically, such as the Internet and phone.


India is a vast nation and has an active 462,124,989 internet users with a penetration rate of 34.8 % (Internet Live Stats (www.InternetLiveStats.com).

This revolution of eCommerce came into being in the early 1990 but spread at a very fast pace in the late 1990s. Some of the retailers such as Rediff shopping, Sifi shopping and India times were the veterans paving the way for many such as players such as Flipkart.com, Snap deal,Homeshop18 etc. E commerce giants operating in India has greatly changed the way Indian consumers’ shop.



However just like there are two sides to every coin similarly there are pros and cons of eCommerce. Definitely it has given a strict competition to the retail segment in India but India still holds a very strong position as retail is concerned and is the fifth largest country in terms of retail.


There was a time when retail was unorganized and scattered, and posed many difficulties, however times have changed and after the liberalization of the Indian economy the retail sector in India is organised and has spread it wings in all corners with brands like the Big Bazaar, Shopper stop and Ritu wears. The crux of this debate from a consumer point of view is that, the consumer will buy a product where he gets it at a cheaper price, better quality without much hassle. Now let’s look at this debate from a seller point of view.

Indian retail brands

Cost involved in opening a store

Opening a store online works out to cheaper as compared to an organised retain store. In case of an online store the major expenses are that of a web hosting, technical support and P&P. In case of a retail store one needs to take care of utility bills, cleanliness of the store and rent of the premises.



When we talk about instant sale, then it has been found by a study in California that, chances of instant purchase is greater in case of retail shopping than in online shopping. People generally like to window shop more in case of online shopping and take time to compare prices elsewhere. Moreover, its human physiology to pay a higher price for something which is tangible and can be felt at first sight



In case of a local retail business, they can take advantage of the location by studying the competition whereas in case of an ecommerce store, there is immense competition as there is no time and distance barrier.


Economies to scale

Since, there is no distance barrier therefore there is a bigger consumer base for an online store, which helps in  mass sales and thus provide economies to scale to their consumer, however in case of retail business they may have a defined customer base which may be local to them, therefore they may not be able to sell in masses.


Conclusion-Just like any new idea, takes time to absorb, similarly e-commerce has had a wonderful start but would take some time to reach its maximum, and right now according to a recent survey it has been found that most of the ecommerce store in spite of brilliant responses hasn’t yet reported huge profits. However with more awareness and promotion, there seems to be a bright future for e-commerce business by 2020.


Shuchi Bhatnagar
I am a full time software professional who loves to write blogs as well as content for social media websites. I try to squeeze in my writing program whenever time is available . Writing not only provides me with a platform where I can express what I feel with full integrity and dedication but also is a great medium to build on your inter personal skills. I believe every little piece of writing is important if it moves someone’s life in a positive way.

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