e-commerce carnage

Indian brick and mortar retailers want to survive they will weed to go online but that will be a bloodbath.

At 148 years old, India’s salt-to-steel conglomerate Tata Group wants to get hip and cool.

So, for its first big gamble on India’s booming e-commerce space, the group says it will only sell Camels—that’s short for “certified authentic merchandise everybody loves”—on its online shopping platform, Tata CLiQ.

It may be a contrived marketing ploy aimed at eventually drawing 100 million customers, but that doesn’t matter. The battle for a share of India’s burgeoning urban, young internet shoppers, is getting bloody. And the Tatas may just have opened a new front.

The group’s move comes four months after Reliance Industries (RIL) launched an online fashion portal Ajio.com to sell branded clothing and accessories to women. Owned by India’s richest man, Mukesh Ambani, RIL runs a large network of fashion, grocery, and electronic stores in the country.

There’s also the Aditya Birla Group, led by 48-year-old billionaire Kumar Mangalam Birla, which runs one of India’s largest fashion retail businesses with departmental stores such as Pantaloons and brands such as Allen Solly. It launched a multi-brand online fashion store, abof.com, in Oct. 2015. Birla, who views online retail as a “sunrise sector from an investment point of view”, plans to “build another billion-dollar business of the group in this space.”

In all, over half-a-dozen large, one-time brick-and-mortar-only retailers are going up against the big guns of India’s e-commerce ecosystem—who, incidentally, are themselves struggling.

Flipkart, India’s largest online retailer, for instance, is hamstrung by everything from devaluation and top-level exits to massive organisational restructuring due to a dearth of funding options. Other players, too, are suffering due to subdued investor sentiment. India’s three largest e-commerce players—Flipkart, Amazon and Snapdeal—are bleeding money to woo customers, reporting combined losses of over Rs5,052 crore in fiscal 2016.

Article Quartz

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