'Online Commerce Will Compliment Physical Retail Stores'

NEW DELHI: Does a new paradigm of digital consumerism in India, which has a market share of $15 billion today, spell doom for the brick and mortar retail shops? Realignment in industry, yes, but physical retail stores are here to stay, experts feel.

"Extremes will not happen. It won't happen like one channel will take away the share of the other channel completely," said Ashvin Vellody, partner, management consulting with KPMG, comparing the physical and e-retail formats serving a similar market segment.

"There may come some tweaking and changes to the existing system. But at a macro level, these changes will only be substantial for a few segments," Ashvin told. "There will be some re-alignment, but shops will not be obliterated completely."

Vellody said there were two aspects to e-retailing -- consumer choice and convenience. "These are the two very important drivers in a relatively free market economy."

Analysts IANS spoke to said the e-commerce industry, thanks to some 243 million internet users in India, is worth $15 billion today. Logging a 30 percent year-on-year growth, it is expected to touch $100 billion in five years, with new players and consolidation.

Also, the e-commerce market in the country has proliferated mainly in books, gadgets of various kinds, electronics and apparel. There are also new entrants in new segments --like real estate companies trying to sell houses online.
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