2016 to witness Internet First brands

Deloitte India doesn’t think etail will meet fate of dotcom

The over Rs 1,900-crore Indian e-commerce market could grow to over Rs 2,700 crore in 2016 on the back of increased digital penetration, better customer experience and higher levels of trust in the established players.

However, the year 2016 could see the strong emergence of Internet First brands in the segments of budget fashion, jewellery, furniture, kids clothing, travel etc., where these companies have an opportunity to establish pan-India brands in under-branded categories involving a non-standard product validation system in the unorganised sector.

“This is virgin territory and will provide the much -needed interactive mechanism to understand the customer better,” said Mr P.N. Sudarshan, partner, Deloitte India.

He said, “Hyperlocal delivery and last mile logistics companies that provided the backbone for the scale achieved by the e-commerce companies will now enable the Internet First Brands to operate efficiently from regional warehouses, while enabling pan-India deliveries and reverse logistics at efficient costs.”

Asked about the e-commerce industry meeting the fate of the dotcom bust, Mr Sudarshan said “it is unlikely that fringe players in the e-commerce space will go belly up.”

There may be just two to three players who dominate this sector but since the fringe players have a foothold and are innovative, they are likely to be taken over by the larger players who want to increase their reach, he said.

The trend has already started with significant acquisitions like Myntra, TaxiForSure, Qikwell, to name a few. This will lead to keener competition and consolidation that will encourage the players to take the road to unit profitability in the short term and business profitability in the long term, he said.