Retailers Brace Up Against Threat From E-commerce Cos

by CXOtoday News Desk    Feb 28, 2014

online shopping

The rising popularity of online e-commerce portals like Flipkart, Snapdeal and Amazon seems to be posing a serious threat to offline retail stores. With more and more customers getting attracted by the massive discounts being offered by these e-tailers, the business of traditional retailers is being badly affected. Some of the electronics companies, in particular, who have been impacted recently are now up in arms against these e-tailing giants.

After Lenovo and Toshiba, Canon India is also taking steps to combat this rising threat. According to an ET report, Canon India is considering longer warranty periods for products bought offline to negate the steep discounts offered by e-tailers. “The problem is that the online retailers are providing heavy discounts that destroy the price point of offline traders. We are considering separate warranties, for example a one-year warranty for online and 15 months for offline,” Alok Bharadwaj, executive vice-president, Canon India, was quoted as saying. Earlier companies like Lenovo and Toshiba had issued warnings on their websites informing customers that Flipkart, Snapdeal and Amazon were not their authorized by them to sell their products.

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Lenovo Does Not Authorise FlipKart, Snapdeal, Amazon

The apex body of the cellphone industry, Indian Cellular Association (ICA), is also planning to issue a consumer advisory on the checks a consumer needs to do before buying products online, says the ET report. Pankaj Mohindroo, president of ICA, said brands are keeping a close watch on the online retailers. Earlier this month, Canon had launched a certification for authorized online retailers in the printers’ category. “We are also thinking of creating a differentiation between online and offline by offering additional services offline,” says Bharadwaj. This could mean special workshops for customers who buy products offline.

E-commerce companies, on the other hand, believe these issues will get settled as the understanding about the online retail space becomes better.  Their ability to offer better discounts probably comes from the fact that they connect multiple brands and sellers. The retailers, however, assert that in order to establish themselves, e-commerce companies are currently working at very low margins which cannot be sustained in the long term.