Online retailing paired with kirana – a formidable combination for emerging markets

Abstract

The World Wide Web was launched in 1991 by Tim Berners Lee and shortly after that, in 1994, Pizza Hut delivered its first pizza after receiving an online order. Electronic commerce is one of the boons of internet and the one that is speculated to alter how businesses will grow in the competitive world. India stands third in the world with over 130 million internet users. This has positively shaped the growth of electronic commerce in the country, from booking tickets to buying clothes to paying bills. Four major factors have advocated the growth and expansion of electronic commerce in India. First and foremost is the rapid penetration of technology, be it the broadband or the smart phones or online banking, has empowered the consumers to access the World Wide Web very easily. Previous research has also highlighted how this impact of internet penetration is magnified specifically in the emerging economies. Second is the fast adoption of the online medium by every major brand as a part of their sales as well as the marketing strategy. Large retailer have also opened stores in the virtual space. The third factor is the convenience consumers derive through online shopping. More and more members of a typical Indian family are joining the workforce which leaves little time regular shopping errands. Consequently people have shifted to buying items online and this is further facilitated by services like cash-on-delivery, buy-back policies and many more. Finally growing real estate prices and low penetration of large format retailing have been indicating for a need to innovate to increase business. In the light of the convenience provided by online and the omnipresent Kirana (mom-and-pop equivalent) stores, it is proposed that these two would be the dominant formats of retailing as a mix of brick and click models.