Small Traders Complain to CCI on Flipkart Etc. Fair Enough?
- Thread starter swatkats
- Start date
blr_p
Skilled
isn't this a bit premature ?
You act like as if these guys can use the govt to shut down any and every e-commerce site out there.[DOUBLEPOST=1383686825][/DOUBLEPOST]
its called going on the offensive, lets accuse them of stuff they might do to us next year, THIS YEAR
raksrules
Elite
These small time vendors will not shutdown in next 100 years too. These are like Mom and Pop shops they call in US. Not everyone has time to go to big malls like Dmart to buy Half Kg atta or bread packet, they will just go to a shop nearby. Similarly with other items like electronics and all, people still want to touch the product and physically buy them in store. It will take at least 1-2 more generations to go online the way people in developed nations do. So they should not really feel threatened.
But the way some of the ecommerce websites have understood what works in India, it is really good. I mean remove COD option and see your orders go down. People are hesitant to give their credit card numbers online, in fact most don't even use CC for the fear of over spending.
But the way some of the ecommerce websites have understood what works in India, it is really good. I mean remove COD option and see your orders go down. People are hesitant to give their credit card numbers online, in fact most don't even use CC for the fear of over spending.
Local brick and mortar owners need to change their attitudes, drastically. I usually prefer online shopping due to the "humans" out there. Even in the malls. They hounds you like pests. Shoppers Stop is the most irritating. "Can I help you". And they eye you like: stealer.
6pack
ex-Mod
^ yeah same thing happened to me in shoppers stop in Mumbai. Sales people keep hovering around you like flies.
One good incident I remembered of brick and mortar stores was when some owners offer you a glass of tea or cold drink for shopping at their place. I guess only the old shopkeepers give that experience to customers who keep coming back to their stores to buy stuff. You don't get this sort of welcoming behavior from malls or online stores.
One good incident I remembered of brick and mortar stores was when some owners offer you a glass of tea or cold drink for shopping at their place. I guess only the old shopkeepers give that experience to customers who keep coming back to their stores to buy stuff. You don't get this sort of welcoming behavior from malls or online stores.
blr_p
Skilled
You just described my attitude towards buying. I don't need no online stuff when i can get just as competitive prices on the street. Want to buy with black money ? no probs, the local shop guys will take cash.
Upto now the prices offered were competitive. When there are no shops to go to or things i cannot find locally that is when i go online. And therein lies the value of online for people that cannot just walk up to a shop and buy things.
These small time guys are whining about customers they never could have got in the first place !!
It takes an incredible leap of faith to buy things off a webpage.
And then there is no looking back...! Slippery slope. And all these thematic forums aggravate the situation manifold. Anyways, need to check out some 'watched items' on the Bay.
Bye...!
Interesting read. I do have a question though. Amazon started drawing in a profit for the first time only in 2003 and even then it has been very small considering it's size.
http://appleinsider.com/articles/13...ontrasted-with-amazons-hopes-to-turn-a-profit
Even flipkart is at a loss. I do shop online and I understand the benefits. I also know for a fact that a lot of offline retailers still give very competitive prices matching or bettering the online retailers.
My simple worry is that when these online retailers become very large or start controlling most of the supply chain it is not good for the customers.
E.g. Look at Microsoft. Office and Windows are priced offensively and the only changes that they do to the different versions is mostly synthetic. That is because of a lack of competition. If Flipkart or Amazon becomes the all in one in India might not be good for the others.
http://appleinsider.com/articles/13...ontrasted-with-amazons-hopes-to-turn-a-profit
Even flipkart is at a loss. I do shop online and I understand the benefits. I also know for a fact that a lot of offline retailers still give very competitive prices matching or bettering the online retailers.
My simple worry is that when these online retailers become very large or start controlling most of the supply chain it is not good for the customers.
E.g. Look at Microsoft. Office and Windows are priced offensively and the only changes that they do to the different versions is mostly synthetic. That is because of a lack of competition. If Flipkart or Amazon becomes the all in one in India might not be good for the others.
Whereas that is a valid argument, the reason the computer industry is in this mess is because brick and mortar has no competition at all, and there is large scale price fixing and cartelisation at street retail level.
I understand that it is not only computers that are bought online. But this is largely true of all segments. Why do you think all major garment brands have exclusive factory stores, and offer for sales and end of season sales? It's because regular simply isn't moving enough product. You don't want to know what is happening with the retail industry, it is bleeding. From every single place there can be blood. Brands have had to take things into their own hands. The brand perspective and this is professional knowledge - is also very hesitant to come online because it leads to a dent in their image. There are portals that only do business with high end brands and high end people. You can't get on to flipkart and buy Calvin Klein, but that brand does twenty times more business online than from stores.
It will take a long, long time for online to even match organised retail - which is essentially high street and mall variety. It may never catch traditional retail, or even mildly threaten it. At best it may usurp a few traditional categories. Medicines, specially sensitive kinds, have already moved totally to online, and I see price sensitive products moving to. But people will still shop traditional for the bulk of their needs. That will never change. It hasn't even changed in the most developed and connected markets, let alone a third world country.
I understand that it is not only computers that are bought online. But this is largely true of all segments. Why do you think all major garment brands have exclusive factory stores, and offer for sales and end of season sales? It's because regular simply isn't moving enough product. You don't want to know what is happening with the retail industry, it is bleeding. From every single place there can be blood. Brands have had to take things into their own hands. The brand perspective and this is professional knowledge - is also very hesitant to come online because it leads to a dent in their image. There are portals that only do business with high end brands and high end people. You can't get on to flipkart and buy Calvin Klein, but that brand does twenty times more business online than from stores.
It will take a long, long time for online to even match organised retail - which is essentially high street and mall variety. It may never catch traditional retail, or even mildly threaten it. At best it may usurp a few traditional categories. Medicines, specially sensitive kinds, have already moved totally to online, and I see price sensitive products moving to. But people will still shop traditional for the bulk of their needs. That will never change. It hasn't even changed in the most developed and connected markets, let alone a third world country.
blr_p
Skilled
They still have to compete with each other. Which is harder than competing against smaller competitors.
This is an extreme example. M$ offers a product or two. online shops sell hundreds & thousands of different products.
blr_p
Skilled
greenhorn
Patron
I don't know where all this hate for brick and mortar products comes from. I have had sad experiences buying from flipkart and other online shops. There are bad and good shops everywhere, regardless of online or brick and mortar. I've had FK products die on me a day outside their replacement guarantee, and the manufacturer going awol, and brick and mortar retailers fixing things out of warranty as goodwill, at their own cost (not manufacturer).
People rant about items being sold at MRP by B&M stores. There are stores where you will get stuff for prices similar to FK or less. You just need to hunt around. It's just easier to hunt online, so people assume its cheaper online. If you find the source locally, you can get it even cheaper - these guys are the guys who fulfil FK/HS18 orders. We found such a guy after buying a 42" TV online. He's given us rather good deals than what we can find online.
The reason these retailers are pissed off about FK etc is because they are using rather non conventional, and according to them, unethical (though the question of unethical in business is a rather subjective one) means. All modern trade and online retailers are in a race to grow marketshare (even at the cost of profitablity). In order to achieve that, they have started a price war, which will not end well. if you think This means cheaper prices - this is only while the war is on. Once they establish themselves, They will be no worse than the brick and mortar stores which you passionately hated. You can catch a glimpse of that already. Are Flipkart's Prices or service anywhere near what they used to be a couple of years ago?
To the customer, it might seem to be a case of uncompetitive behaviour, but the truth is more subtle. It's called channel conflict, and ideally should be handled by the manufacturers by enforcing their price strictly, but if manufacturers are desperate to meet sales, anything can happen.
I'll give an example of what was done by a large modern trade retailer. Imagine a Smartphone that costs 10K. Imagine the dealer price is 9k. Typically the manufacturer showrooms will sell it at MRP, and the retailers undercut it to some extent, but they have real costs, so they will not go below the dealer cost, let's say 9200.
The Modern trade outlet has different ideas. Typically Since they buy in bulk, and have better procurement channels, they can get the phone for, say 8.9k. It doesn't end there. They get better payment terms too - typically a month of credit - ie they need to pay for the item only a month after it gets sold. And modern trade needs a lot of Working Capital - to buy vegetables, grains, and other fast moving items. Working capital loans are not free. So they have an opportunity here. They mark the phone at a price very close to their cost price, maybe at , or in some cases even less. The phones sell like hot cakes, and they suddenly are sitting on a pile of cash they need to return at the end of the month only, which they can meanwhile, use to finance their other inventory.
If you look at it from the POV of another dealer, this sounds like cheating right?
But if you are a customer, hey, it's a low price, who cares how it happens.
This was just an analogy. Though I can imagine what happens at FK, I don't want to speculate or post wrong information.
People rant about items being sold at MRP by B&M stores. There are stores where you will get stuff for prices similar to FK or less. You just need to hunt around. It's just easier to hunt online, so people assume its cheaper online. If you find the source locally, you can get it even cheaper - these guys are the guys who fulfil FK/HS18 orders. We found such a guy after buying a 42" TV online. He's given us rather good deals than what we can find online.
The reason these retailers are pissed off about FK etc is because they are using rather non conventional, and according to them, unethical (though the question of unethical in business is a rather subjective one) means. All modern trade and online retailers are in a race to grow marketshare (even at the cost of profitablity). In order to achieve that, they have started a price war, which will not end well. if you think This means cheaper prices - this is only while the war is on. Once they establish themselves, They will be no worse than the brick and mortar stores which you passionately hated. You can catch a glimpse of that already. Are Flipkart's Prices or service anywhere near what they used to be a couple of years ago?
To the customer, it might seem to be a case of uncompetitive behaviour, but the truth is more subtle. It's called channel conflict, and ideally should be handled by the manufacturers by enforcing their price strictly, but if manufacturers are desperate to meet sales, anything can happen.
I'll give an example of what was done by a large modern trade retailer. Imagine a Smartphone that costs 10K. Imagine the dealer price is 9k. Typically the manufacturer showrooms will sell it at MRP, and the retailers undercut it to some extent, but they have real costs, so they will not go below the dealer cost, let's say 9200.
The Modern trade outlet has different ideas. Typically Since they buy in bulk, and have better procurement channels, they can get the phone for, say 8.9k. It doesn't end there. They get better payment terms too - typically a month of credit - ie they need to pay for the item only a month after it gets sold. And modern trade needs a lot of Working Capital - to buy vegetables, grains, and other fast moving items. Working capital loans are not free. So they have an opportunity here. They mark the phone at a price very close to their cost price, maybe at , or in some cases even less. The phones sell like hot cakes, and they suddenly are sitting on a pile of cash they need to return at the end of the month only, which they can meanwhile, use to finance their other inventory.
If you look at it from the POV of another dealer, this sounds like cheating right?
But if you are a customer, hey, it's a low price, who cares how it happens.
This was just an analogy. Though I can imagine what happens at FK, I don't want to speculate or post wrong information.
Party Monger
Skilled
Is not just about online vs offline its about organized retail vs mom&pop shops and family business that are big but still run personally.
Lets take for example clothes-
I used to go to this shop, which is a very big clothes retailer in my city. When I used to shop there, the idiots that show clothes used to be more arrogant than most of our bosses, making snide remarks. They made faces when you ask them to show more, or when you want to try more than two-three. My parents used to nudge me to try just one or two and buy everything I need quickly. Those idiots used to recommend me stuff that was extremely stupid and doesn't fit me even now that I have grown two sizes.
Parents trusted them and they had a good collection but the use for me was NIL.
Enter Lifestyle. I have never visited that shop again though my parents still go. I go to Lifestyle and try as many as I like in multiple sizes to see what fits the best. The employees are almost dying to help me in what ever way they can. I kid you not. This lady was getting me stuff from various brands once she understood what I liked and was such a big help and did it with a smile. And this has been my experience every time even though i prefer to do it alone most times. And you can just roam around pick stuff you like and try, cant ask for more. Even the prices come to same after discounts and I don't end up with 1 in 5 pairs that are good, All my clothes are amazing with variety and spread across brands, colors and even sizes(since i'm between medium and large). It is a huge help and i cant wait to show those bastards the middle finger if I go to that cunt of a shop again.
Clothes Shopping is no more a traumatic experience for me atleast Maybe I am a demanding customer but I absolutely recommend LifeStyle for anyone for clothes shopping. Even ttheir in-house brands are premium with decent price-tags and great fitting. And its not remotely downmarket like bigbazaar and even pantaloons and reliance clothes mart or what ever they call it, with just 3-4 trial rooms >.< These guys had close to 20 trial rooms on mens floor. Though its less at times like on Diwali, most times its very accessible. And everyone just wants to help you
With regards to online is the same with electronics like pen-drives, modems, books, etc. For higher value purchase I have figured out places in city that have a good mix of price and service and since I know a lot of stuff and they dont have much scope to bullshit they generally behave and play fair. All you need to do is check online once for prices and forums for the latest hotstuff. I will switch to something like flipkart etc for phones and other electronics when they are more experienced in dealing with sittuations and matured to a profitable model. I dont mind paying equal to these local shops or even percent more as long as im assured of the quality of the product, its life and zero drama while buying.
Lets take for example clothes-
I used to go to this shop, which is a very big clothes retailer in my city. When I used to shop there, the idiots that show clothes used to be more arrogant than most of our bosses, making snide remarks. They made faces when you ask them to show more, or when you want to try more than two-three. My parents used to nudge me to try just one or two and buy everything I need quickly. Those idiots used to recommend me stuff that was extremely stupid and doesn't fit me even now that I have grown two sizes.
Parents trusted them and they had a good collection but the use for me was NIL.Enter Lifestyle. I have never visited that shop again though my parents still go. I go to Lifestyle and try as many as I like in multiple sizes to see what fits the best. The employees are almost dying to help me in what ever way they can. I kid you not. This lady was getting me stuff from various brands once she understood what I liked and was such a big help and did it with a smile. And this has been my experience every time even though i prefer to do it alone most times. And you can just roam around pick stuff you like and try, cant ask for more. Even the prices come to same after discounts and I don't end up with 1 in 5 pairs that are good, All my clothes are amazing with variety and spread across brands, colors and even sizes(since i'm between medium and large). It is a huge help and i cant wait to show those bastards the middle finger if I go to that cunt of a shop again.
Clothes Shopping is no more a traumatic experience for me atleast
Maybe I am a demanding customer but I absolutely recommend LifeStyle for anyone for clothes shopping. Even ttheir in-house brands are premium with decent price-tags and great fitting. And its not remotely downmarket like bigbazaar and even pantaloons and reliance clothes mart or what ever they call it, with just 3-4 trial rooms >.< These guys had close to 20 trial rooms on mens floor. Though its less at times like on Diwali, most times its very accessible. And everyone just wants to help you With regards to online is the same with electronics like pen-drives, modems, books, etc. For higher value purchase I have figured out places in city that have a good mix of price and service and since I know a lot of stuff and they dont have much scope to bullshit they generally behave and play fair. All you need to do is check online once for prices and forums for the latest hotstuff. I will switch to something like flipkart etc for phones and other electronics when they are more experienced in dealing with sittuations and matured to a profitable model. I dont mind paying equal to these local shops or even percent more as long as im assured of the quality of the product, its life and zero drama while buying.
Party Monger
Skilled
Hello, long time.Insert huge post
About unfair practices, like you said in business unfair is a matter of perspective. You look at it from the angle of prices, I look at it ffrom the angle of business and they are setting up. They are CREATING a market and burning VC capital and providing cheap prices to usher growth. I can assure you that the presert day offline setup is way more optimized than anything that is there online. The offline logistics are set and most prices are set according to offline logistics. So the costs are not less in anyway for online retailers, there is -
> Customer procurement cost, includes advertisement and heavy discounts.
> Logistics. Huge costs. India has probably the worst courier services know anywhere. lol
> Payment. RBI regularly KLPD's the buying experience with two passwords and sacrificing first borns to complete the transaction. They have good reason and want to be on top of things but it does seem like a lot of extra work for people.
> COD. The risks with cash in hands of people that are paid so less
Then people not accepting orders. Putting up systems to counter that. It hurts the margins a lot.> The Indian way of thinking, buying only when the costs are very cheap and not for convenience.
There are many more but you get the point, right? These all add up to huge costs in a business where everything is in percentages and MRPs are set as per offline costs and margins. It take huge amounts of experienced human talent to orchestrate all these and bring in a profit even after all the economies of scale. Lets show a bit of trust, shall we?
One big online retailer can be policed for higher prices, mass campaigns regarding their greediness can be done and alternative can spring up over night. But systematic over charging by mom and shops included by design to fool 99% of the customers cant be dealt with easily.
We both know how hard it is to find that one shopkeeper for a line of products, that gives us a good deal and actually looks out for OUR interest as a way of further his own, instead of just his.
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greenhorn
Patron
I'm all for better service and prices as long as it is sustainable. I'm a loyal pantaloons customer, but I haunt a hole in the wall factory seconds shop - they also give very nice deals. But if you go to a main road shop with an established client base, you may not get the same treatment. I know the hole in the wall shop's business model is sustainable. But pantaloons - not right now. Nilgiris is the only modern trade chain that's making a profit right now. Most of the others are profitable at a store level, or perhaps at an area level, but not as a company.
Competition is good, But do we really want predatory pricing?
Competition is good, But do we really want predatory pricing?
alekhkhanna
Skilled
Incidentally, I'm reading something similar to what is being discussed on the thread: https://www.goodreads.com/book/show/6431585-cheap?from_search=true
Fascinating stuff !
Fascinating stuff !
swatkats
Skilled
Recently mom ordered some Juice maker from HS18 when she watch it on their TV channel. I was like impressed thought it was less than MRP. When it arrived yesterday i was shocked to see it is being Sold for MRP. I told my mom not to make such purchases in future because i know stores where i can get a 2-5% off and I can actually physically look at the product.
Realization no 3 or 4: Online Retailers ain't Selling it for Cheap.
Realization no 3 or 4: Online Retailers ain't Selling it for Cheap.
It Seems you're Just like me, Liking all the Bare Denim Stuff which comes for less than 1000/each on a 3 Jeans purchase.
swatkats
Skilled
Offline Retailers Drag Govt To Court Demanding FDI Level Playing Field With Online Retailers
Threatened by the rapid growth of online shopping, the country's top brick and-mortar retailers have dragged the central government to court, demanding level playing field in FDI norms vis-a-vis ecommerce players.
Retailers Association of India, which represents top retailers such as Future Group, Shoppers Stop and Reliance Retail, moved the Delhi High Court against the Union government on Monday. "We are demanding parity," said lawyer Abhishek Manu Singhvi, who represents the country's largest lobby of organised retailers. The court is expected to hear the case on Wednesday.
Suresh, chief executive of Arvind Lifestyle Brands that operates a host of global brands including Gap, US Polo and Calvin Klein, said, "We are not opposing FDI in ecommerce. We just want a level playing field for both and want equal policies for both the offline and online channels."
Analysts, however, feel that even if India were to create similar policies for both offline and online retailers, physical store operators are unlikely to attract the kind of investor response as ecommerce.
"If you ask me, it (investments in physical stores) cannot be such numbers that we saw in ecommerce. Numbers will be very different for brick and mortar as we don't see them getting millions and billions of dollars," said Harminder Sahni, founder of retail consultancy Wazir Advisors.
http://economictimes.indiatimes.com...-e-tailers/articleshow/47349497.cms?prtpage=1
Threatened by the rapid growth of online shopping, the country's top brick and-mortar retailers have dragged the central government to court, demanding level playing field in FDI norms vis-a-vis ecommerce players.
Retailers Association of India, which represents top retailers such as Future Group, Shoppers Stop and Reliance Retail, moved the Delhi High Court against the Union government on Monday. "We are demanding parity," said lawyer Abhishek Manu Singhvi, who represents the country's largest lobby of organised retailers. The court is expected to hear the case on Wednesday.
Suresh, chief executive of Arvind Lifestyle Brands that operates a host of global brands including Gap, US Polo and Calvin Klein, said, "We are not opposing FDI in ecommerce. We just want a level playing field for both and want equal policies for both the offline and online channels."
Analysts, however, feel that even if India were to create similar policies for both offline and online retailers, physical store operators are unlikely to attract the kind of investor response as ecommerce.
"If you ask me, it (investments in physical stores) cannot be such numbers that we saw in ecommerce. Numbers will be very different for brick and mortar as we don't see them getting millions and billions of dollars," said Harminder Sahni, founder of retail consultancy Wazir Advisors.
http://economictimes.indiatimes.com...-e-tailers/articleshow/47349497.cms?prtpage=1