1) Do you really think, it is good that estores buy items for 100 rupee, and sell them at 70 rupee ?? ,
Tell me something honestly - since when has it my (or your) business HOW someone runs their firms/companies? If you personally know someone who is selling items at a loss can you stop them from doing so?
As a consumer I'm delighted that I get the lowest price possible. I don't care how the seller is doing it as long as the item is -
1) Genuine
2) Legally imported
3) With a proper tax paid bill
4) Offers the same warranty the OEM does
estore does have much more overhead cost in comparision to B&M stores, even if you talk in comparison to rent/staff/electricity.
No, its the other way around. E-stores have much -LESS- overheads compared to B&M stores which is why they can offer higher discounts while still being profitable versus B&M stores.
The only reason why i am saying this because, i am closely involved (management level) and even got good lump sump of money invested in Yebhi.com, which is going to file bankruptcy soon, and has received more than 400+ crores in investment.
I don't understand the relevance of the above statement. Are you saying that just because it "recd. more than 400+ crores in investment" it shouldn't die? Thats not how a business works. Two points here:
1) You (and other Yebhi investors) have only yourself to blame from not doing a proper due diligence on Yebhi before investing your money
2) Any business has an associated "risk factor" - Yebhi apparently didn't do things right and must therefore shut.
frankly speaking i don't think any B&M stores can survive this strategy, i am against only this thing of estores, other than it i do fully support it, and in near future you might even see my own online apparel store of self manufactured brand
If B&M stores die out that's too bad. B&M stores aren't a "national monument" or "heritage sites" that need to be somehow "protected". Just like your Yebhi.com example - if they fail to offer value & compete effectively they will not survive.
Also, what will happen if you start your own online apparel store and some other site buys items from you at FULL PRICE and sells them at 50% off. Then what will you do? Would you care if this "other site" happened to be a major customer who accounted for 80% of your sales? Think about that.
Secondly Army Canteen thing, according to my little knowledge, govt. refund all the taxes and duties involved in item to the related vendor, which makes the items so cheap
, you might be already knowing we generally pay 35-40% of tax in any items which we buy (VAT+ Excise + etc
)
It honestly doensn't matter HOW they do it.
My point is, why don't B&M shop owners COMPLAIN to the Govt. and tell them that by allowing the Army Canteen to sell things at lower prices the whole year around they are "destroying the brands"?
Look, let me give you another real world example of why all this "destroying brands" line by the B&M retailers is absolute rubbish.
There is a shopping mall in Gurgaon called "Central". Every year (for several years now) on Aug 14 & 15th, they have a "Flat 50% off sale" across all shops in their mall. Now there are 4-5 other gigantic malls within 500 feet of Central.
However NONE of the other malls offer the same deal despite the fact that most malls have (more or less) the same shops/brands.
So why don't the other mall owners complain to the "manufacturers" that Central is "destroying their brands" and therefore the OEM's should not stop selling items to the stores in Central? Also, do you see online stores QQ'ing about how Central is offering 50% off on everything? This is such BS.
Let me give you an interesting stat.
According to Gartner Inc., the India e-commerce market will reach $6 billion in 2015 - which is a massive 70 percent increase over 2014's revenue of $3.5 billion. The thing I find most interesting about this stat is that
currently E-commerce in India represents less than 4 percent of the total retail market !
Do you understand the significance of that statement as well as the part I marked in bold/underline/italic?
Imagine what will happen when the E-Commerce market hit 20 or 30 or 50 percent of retail market levels. Where are all these new consumers going to come from? Where were they buying from previously? Who is going to be at the losing end of this battle? The answers to all 3 questions are pretty obvious. A very significant majority of these "new age online consumers" will be former B&M buyers!
Keeping the above in mind, do you honestly think that any company, even biggies like Sony, LG, Samsung etc. can afford to ignore such a huge and continuously growing consumer group? It would be suicide to do so. Its the future way business will be done and the OEM's fully know this. Any OEM that tries to "curtail" sales of their items with E-tailers (by refusing to honor warranties or other such nonsense) is only shooting themselves in the foot.
They will -ALL- come in line at some point or the other. You can mark my words on this. It might take 3 years or 5 years or 10 years, but it will happen.
And when it does, the OEM's will actually make MORE MONEY than they currently do because they will be cutting out a very "expensive" overhead in their delivery/distribution chain - namely the B&M stores! That margin will now be split between the OEM and the E-tailers.
Win-win for both as well as consumers...
