Global Firms Take Online Route to Enter Indian e-Com Sector

BENGALURU: Global companies are increasing their entry in Indian market through online media. This helps the companies to save capital and sketch an idea about their prospects in the Indian retail market, reports Economic Times.

Chief Marketing Officer and head of international brands business of Myntra, Gunjan Soni confirms the growth of this trend in last six to eight months. Soni comments, "They are encouraged by looking at the e-commerce growth in their country and ours, and as the trend of fast-fashion is growing, online becomes a less capital intensive route." 

In the last two months, then more than hundred international brands got associated with top e-com players like Amazon, Myntra, Jabong, Darvey, Snapdeal and more. The foreign company list includes US-based The North Face and British Knights through Myntra and Amazon.in respectively.  For Jabong, it is UK-based Missguided. Chinese mobile brand Xiaomi’s link with Flipkart in 2014, counts as one of the oldest tie-up.

Bruno Feltracco, Vice-President and Managing Director of Asia Pacific describes, "We made this choice based on all the evolution we saw around us. Our experience in China helped us decide to first go online and understand the market. Then perhaps nothing prevents us to go offline after we reach a certain stage."

As per a PwC report, online transactions will account for 3percent of total retails among Indian shoppers by 2020. From five million in 2013, orders are expected to reach up to 12million by 2016.

Nitin Passi, founder of Missguided said "India is a diverse country and we are experimenting via online to understand the market closely." Passi adds, "Based on how the experience goes, we will see if we should come up with an Indian specific range.”

A recent report of JLL India shows dearth of quality in Indian retail space in 2015, and predicts the state to continue for 2016. JLL mentions that India made consolidation of real estate business as retailers aimed for profit making and looked down on loss making in 2015.
Many international brands shut their business or exchanged business model and pricing strategy with Indian customers. Examples include Alfred Dunhill, British luxury menswear and accessories brand that shut down in 2012. Versace began with a new pricing strategy and 7 for all mankind, the American jean wear brand started business in India in 2010, but is now available online.

Nakul Bajaj, CEO of Darveys, an online luxury fashion portal said, "A global brand has to have an online presence to let their potential customers know what unique are they offering."Bajaj further adds, "It is only when a consumer understands the brand's offering that they become a loyal customer." 

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