The blistering growth of e-commerce inward Bharat (estimated to endure unopen to a size of $ 1.6 billion) has thrown upwardly a Pandora's box of problems for marketers. The channel conflict has croak intense betwixt the traditional brick together with mortar channel members together with the online marketplace place. The conflict is existent together with brands are caught inward betwixt the struggle for the customer's wallet.
The lawsuit has come upwardly to the forefront with brands similar Toshiba, Lenovo together with Cannon publishing advisory to customers on purchasing their brands from online retailers. ( read intelligence hither : Lenovo, Cannon). The basic lawsuit betwixt the online retailers together with the traditional channel members is the predatory pricing adopted past times the online retailers. Traditional retailers alongside their huge overheads together with investments are non able to gibe the pricing of the online retailers.
The lawsuit has croak to a greater extent than complicated alongside large online retailers similar Flipkart, Snapdeal adopting the 'market place' model . The eCommerce marketplace has 2 models- Inventory model where the online retailer owns together with controls the inventory together with the marketplace house model where the online retailer acts equally the platform which connects the consumers together with the retailers.
In India, the tendency is that many major players similar Flipkart, Snapdeal etc lead keep moved to the marketplace house model. So these large online brands using applied scientific discipline equally the enabler connects the customers together with retailer partners together with ensures seamless transactions betwixt them.
Online retailers similar Flipkart together with Snapdeal are able to patronize large number of retailers to its marketplace house hence offering a huge spread of categories together with brands to the customers. The online marketplace house is a Two-Sided market where the success of the online retailer lies inward his might to growth the number of partner retailers together with besides the number of shoppers to the site.
Because at that spot are large number of retailers inward the online marketplace place, the pricing becomes predatory together with huge discounts tin displace endure offered to the shoppers. This has proved to endure the indicate of contention. It was impossible for traditional channel partners to gibe the cost cuts offered past times the marketplace place. With increasing popularity together with adoption of e-commerce inward India, its normal for the traditional channel members to yell foul.
To pacify the traditional channels brands has been adopting major initiatives like
- offering additional services similar additional warranty on products purchased through traditional channels.
- Policy on uniform discounting across channels.
- Issuing advisory to consumers on benefits of purchasing through authorized retailers.
- Issuing certification to authorized retailers who agrees to abide past times mutual rules.
- Advisory against un-authorized retailers.
However inward many cases, consumers overlook the advisory together with accept the gamble of purchasing from unauthorized retailers. The cost takes the front end spot inward comparing alongside the warranty offers.
Experts opine that these issues volition endure sorted out but volition accept time. Brands are instantly increasingly asked to furnish clear differentiation to traditional retailers together with so that their describe of piece of job concern is non suffered . It has to endure noted that traditional retailers offering many valuable services to consumers inward damage of data , production display etc. Consumers beingness smart avail these services at the traditional retailers together with construct the concluding buy at the online retailers.
