Are the E Commerce companies hurting the offline stores business?

Are the E Commerce companies hurting the offline stores business?

Flipkart through its Big Billion Day Sale has not only drawn customer’s attraction and set new milestone in online shopping. In protest many offline traders association has criticized such sales and requested commerce ministry to regulate the E commerce companies. But, we need to see that this threat is real or it is just propaganda against E commerce companies.

Yes:

-A supplier has to balance the demands between online and offline trade. If such online sales become a common phenomenon then the equilibrium of supply to different retail chains get distorted.

-The limits of discounts offered by online companies cannot be matched by offline traders. So, it is against the healthy competition spirit of the market.

-Also, cases of defective product delivery by E commerce companies have been on rise. This practice not only shatters customer confidence but also impacts brand value of that product’s company.

-Offline traders have to pay sales tax, VAT etc. but there is no uniform tax policy for these companies. This results in revenue loss to government as well.

No:

-Most E Commerce companies are online market places where any offline retailer can sell their products to a larger customer base. This will increase sales of offline retailers.

-Customers find online shopping more comfortable, plus they have more options to choose from. So, naturally they will go for E commerce companies for shopping.

-India is moving rapidly towards digitalization. This has created vast opportunity for the E commerce companies. In fact offline retail stores should take it as an opportunity to expand their customer base.

-Even offline stores use discounts option to increase their sales figure. Though the demand for regulating discounts limit is legitimate but it should be applicable for both offline and online companies.

Conclusion:

E commerce is rapidly expanding in Indian market. Government can regulate it, but it cannot put restrictions on it as demanded by many offline traders. Also, the future belongs to E commerce as internet penetration is increasing in India. Offline stores have to come to online platform in long run to save themselves from extinction. The most important aspect in this scenario is that customers have an upper hand in choosing their shopping option and they have emerged as the true winner.

The article written with reference to carrierRide.com

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