Advantages of online retailing

Answer 1

Benefits of organised retail

Let us examine what organised retail involves. The organised retail system enhances efficiency in the value chain. The farmer gets a better price and grows a better quality of the product; and, more importantly, is not forced to do so, and only gets into such contracts with the corporate because it benefits him.

The value chain is truncated as the intermediate layers are pruned and, in the process, an organised infrastructure structure is created.

This starts at the purchase level at farm gate and moves across the packing, transportation, warehousing (including cold storage, when required), processing and packaging stages before being delivered at the consumer's end.

The consumer buys from these outlets because he gets the right quality at a lower price. Outlets such as Spinach, Big Bazaar, Reliance Retail and Subhiksha have been delivering quality produce at lower prices. Alongside, there are vast investments being made, which open up multiple employment opportunities of a different kind. The Government also gains substantially as all the taxes and duties are paid along the way and there are no leakages. Therefore, all the parties concerned stand to gain. However, there is one class that apparently gets affected adversely, which is the trader. Given that retail is generally unorganised, it is but natural that if there is a large retailer, it could replace several small ones. How does one tackle this issue?

To begin with it must be stated that the so called 'mom and pop stores', which is the name given to our friendly retail grocer, will always have their own role to play. Home delivery services, the convenience of being next door, availability of small quantities of goods (like sachets and in low denominations), credit facilities, personalised service etc are some of the benefits that retain customer loyalty to these outlets. But, to the extent that there would be some replacement of loyalty, there can be a social problem even though this is not one for Economics to resolve. But, there is a way out. The large retailers cannot be everywhere as the investment involved is considerable. The small retailers will become franchisees of the corporates and can enjoy a fixed income plus commissions.

Trader-corporate link-up

Moreover, there is a growing trend of the these shops to get associated with the larger corporates such as Hindustan Unilever, Marico and Dabur, which have set up their own chains with such names as Super Value, Parivar and Mera respectively where the goods are sold to them at the same price as that to large retail chains on certain conditionality like focus on display or walking space for consumers.

Alternatively, the smaller vegetable and fruits vendors could become employees of the corporate retail chain, which is also taking place in a gradual manner. Further, the local shop owner, who is the last intermediary in the chain, can actually procure from these corporate retail stores and save on costs and sell them to the consumer.

Thus, while the mindset has to change and some adjustment made, it is certainly not going to be anywhere close to large-scale substitution taking place.

Answer 2

online retailing is the very fastest way to buy products by homeitself .