The last 2 years have caused disruption in the Indian retail sector due to a series of lockdowns and social distancing norms and driven an increase in e-commerce transactions. With no access to physical markets, people were left with little option but to use online platforms to make purchases, and online purchasing emerged as a lifeline for both retailers as well as consumers.

The Indian e-commerce market is expected to reach $120 billion by 2026, from $38 billion in 2021, according to industry body FICCI and property consultancy Anarock. 

In line with this e-commerce growth, various legacy brands like SOCH, Madame, Nalli Group of Companies, and V-Bazaar Retail have highlighted the shift they have observed in consumer behavior and the growth they have seen in the e-commerce business at IReC (Industry of Retail and E-commerce summit) 2022.

Growth in E-Commerce Biz

The biggest thing that the pandemic has taught the brands is that they have to be present where the consumers are. “Initially, there were talks that e-commerce is never going to work, especially for apparel as touch and feel are important to buy a product. But in the past 2 years, we have seen e-commerce getting accelerated. You've got to keep an eye on your consumer and think about where they're coming in from and what are the ways in which you can reach out to them in order to grow your sales,” Lavanya Nalli, Chairperson, Nalli Group of Companies said.

“About five years back, our e-commerce business was practically zero. Today, it's about 8 percent of our total sales. We expect it to go up to 20 percent in the next two years,” Manohar Chatlani, Owner, SOCH stated.

The pandemic has brought a major shift in the business model. “What we’re supposed to do by 2024-2025, we did it in the last two years. For instance, if we think our e-commerce share should be about 15 percent of our total business by 2024-25, so we had to do it right now and probably we all did it,” Akhil Jain, Executive Director, Madame asserted.

In the rural parts of India, the acceptance of e-commerce wasn't there at all. However, the pandemic has escalated the e-commerce model; it's acted as a catalyst for it. “In these two years, we have upgraded our infrastructure, we have gone real-time with the data, we have had the cloud setup done, and we have also launched our online-only retail setup. The goal is to not miss out on the customer and reach out to the customers in the places where they are present,” Raghav Agarwal, Head – FMCG, and E-Commerce, V-Bazaar Retail added.

Marketplaces v/s D2C Platform – Which Works Better?

SOCH’s 21 percent of sales come from its own website, while 79 percent comes from the marketplace. “The number of clicks and number of visitors to the marketplaces is huge compared to our own site; there's no comparison. If a brand wants to be a big e-commerce player, they have to go to a marketplace. We are able to sell almost 40 percent of our products at full prices on marketplaces and for us, it is a liquidation channel. It cost us almost as much to sell on the marketplace as in our own brick-and-mortar stores. So for us, it doesn't make a difference where we liquidate,” Chatlani noted.

The marketplaces offer the brand to reach maximum pin codes. Probably, the brands’ D2C will never be able to scale up to that particular level. “The first thing that we try to do with our D2C is to get the existing offline customers from the loyalty or the CRM programs onto our own D2C platforms so that we can actually provide them an omnichannel experience. But with the marketplace, the kind of money they're spending on customer acquisition and retention is very different. So now as brands or not just our brand, any brand who's in this genre is now working on the experience that the D2C will provide and let the marketplaces do the sales part. For instance, we recently got into licensing agreement with Disney and Marvel. So what we started doing is before launching the collections on our own stores, we started launching them on our own D2C and marketplaces so that it starts building an experience for the customer. Therefore, marketplaces will always be a big sale channel for us, and the D2C has to evolve with innovation with more customer experience so that it can resonate with what our offline stores offer,” Jain explained