Offline handset retailers bet on online platform to take on e-commerce, post Covid era


New Delhi: Offline handset retailers are converging their online and offline channels, turning to hyperlocal business models to diversify and better compete with e-commerce players. Retailers said that while sales have been strong since the easing of the lockdown due to pent-up demand, limited supply of stocks is turning out to be a dampener.

Offline handset sellers, especially in cities with high Covid-19 infections, have started online portals to receive orders and deliver smartphones from neighborhood stores in less than four hours. Regional retail chains, including Mumbai-based O-line-O, Delhi-based Gomobile, and Delhi-Kolkata based Hotspot, have started their online portals that connect customers to their nearest retailer via Whatsapp or Facebook.

“Covid has taken us five years ahead in time,” said Arvinder Khurana, president of All India Mobile Retailers Association. “Now, retailers have a sense that the future is online and they need to go hyperlocal to battle with e-commerce players.”

These moves by offline retailers come ahead of smartphone brands including Samsung, Oppo, Vivo and Xiaomi, who are still in the initial stages of building a nationwide O20 (offline-to-online) solution. “A consumer is able to shop from a multi-brand catalogue from here and the integration is seamless and much faster than a single brand portal since there is already an established network,” said Upasana Joshi, associate research manager at International Data Corporation.

Meanwhile, long format chains such as Vijay Sales and Sangeetha, which had negligible presence in e-commerce, said they are seeing 5x and 10x jump in online sales, respectively. However, the surge in sales is the outcome of pent-up demand playing out that is bound to come down by next month, analysts and industry executives believe. “Getting stocks is a big issue currently. Had it been normal, I would probably say my business is better post Covid, both online and offline,” said Chandu Reddy, director, Sangeetha Mobiles. “But I am sure it is the lockdown pent-up demand and is bound to come down in a few weeks.”

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However, the hyperlocal ecosystem for mobile phone retail is here to stay. Vibhooti Prasad, MD & CEO of 75 O-line-O stores in Mumbai, Navi Mumbai and Thane, said he has partnered with a courier agency to deliver phones during lockdown but plans to build a supply chain with its workforce post Covid. The portal is currently serving 300 orders per day. “We want to scale up the hyperlocal model to more cities in a way that our in-store employees double in as delivery boys and we are able to control job losses in the sector,” Prasad told ET.

Spice Retail-owned Hotspot, a decade-and-a-half-old brand which owns 100 stores in Delhi and Kolkata, started home delivery and will soon integrate a payments gateway on its website. “Our strategy here on is that we will not deliver products inter-state,” said Atul Kapoor, CEO of Hotspot. “We will be a city-based brand with both online and offline presence.” Kapoor said that the company is in the process to acquire 60 stores in Himachal Pradesh this year.





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