Smartphone, clothing brands go offline as e-commerce discounts dry up

The move to demonetise high-value currency notes in November 2016 led to a slowdown in the online e-commerce sector, where over 50 per cent of orders are driven by cash on delivery.

With venture capital becoming scarcer, it has become more difficult to sustain promotions and discounts with investors’ money.

The government’s guidelines for foreign direct investment in e-commerce in March 2016 also curbed marketplace discounting and set limits for sellers.

In order to adapt to this new market reality, brands are looking to adopt omnichannel approaches. Here’s how this is playing out across some different markets.

Smartphones

Online exclusive smartphone brands such as Xiaomi, OnePlus, LeEco, Motorola, and InFocus are accelerating plans to generate a significant offline presence. Chinese brand LeEco plans to set up four to five experience stores and 100 exclusive outlets in India. 

Clothes

In March this year, Flipkart-owned online fashion retailer Myntra launched its first offline store for its private label Roadster in Bengaluru (the retail store has the same name as the private label).

The store is equipped with multiple touch screen displays which provide data on key looks and the Roadster catalogue. 

Furniture

This year, online furniture store Urban Ladder aims to set up 10 offline brand experience stores with a total investment of more than $4 million. Urban Ladder, which raised more than $13 million from Sequoia Capital, Kalaari Capital, and others in February, has applied for a single-brand retail license. 

Food items


Seattle-based Amazon has expanded to open more of its much-discussed physical stores, where drivers can quickly pick up groceries without leaving their cars. In India, Amazon has sought government approval to invest $515 million over five years as it seeks to enter food retailing via brick-and-mortar outlets. 


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