Retailers make a strong comeback in 2016, go online to compete with e-comm majors

By

Maverick Martins

Published
Dec 30, 2016

Retailers made a strong comeback in 2016 by taking the online giants head-on in doling out deals and discounts with the trend expected to continue next year.

“The next couple of years will see more consolidation and a much greater maturity of Omnichannel retail and sustainable retailing practices,” Retailers Association of India (RAI) CEO Kumar Rajagopalan told a news agency.

After being hit hard by online retail last year, debates on e-commerce eating into the retail pie somewhat subsided this year, with heavyweights like Reliance, Mahindra and Future Group expanding their own online ventures to take on players like Amazon, Flipkart and Snapdeal.

In May, Aditya Birla Fashion and Retail — which had acquired Pantaloons a few years ago — further expanded its kitty with addition of Forever 21. It bought the Indian operations from Diana Retail, promoted by DLF Brands for $26 million (around Rs 175.52 crore).

The Mukesh Ambani-led Reliance Industries, which is making a significant push in telecom with Reliance Jio, also forayed into online retail with its fashion portal Ajio.com.

However, the Government’s surprise move to pull high denomination notes from circulation on November 8 made a huge dent in retailers’ earnings, with sales falling by up to 70 per cent in early days.

“Demonetization of Rs 500 and Rs 1,000 notes had an immediate impact on retail, with sales of retailers seeing a plunge of up to 70% in the first few days. Sales of large discretionary items like electronics too plunged. However, essential consumable goods by stores that accept cards/digital money saw an uptake,” Rajagopalan said.

“The note ban has opened up a host of opportunities for innovative partnerships between digital wallets and retailers to embrace digital technologies,” he added.