Don’t compete with e-commerce giants, collaborate: Nagesh to traders

“Amid economic slowdown, the retail scenario will continue to be challenging for those who are unwilling to change themselves. Retailers will have to update their business 24x7 which means they have to adopt omni channels,” said Nagesh. “It does not, however, mean that they have to do it at the cost of brick and mortar stores. Rather, it has to become a combine of sorts,” he added.

Stating that most of the large retailers are getting 2-3 per cent of their business from online and omni channel, Nagesh, also the TRRAIN- Trust for Retailers and Retail Associates of India founder, expects it to account for around 10-15 per cent of their business in the next 10 years.

Urging kirana associations to brush aside their fears of not being able to survive with the competition from e-commerce, the expert said, “Fifty per cent of the Indian retail or consumption business happens in food. Of that, total e-commerce, including Amazon and Flipkart constitutes only 2 per cent. The modern retail is 3 to 4 per cent. Even today, 90-95 per cent of the business of consumption of food is happening through kiranas. There is no way that these will get disrupted in at least 40 years due to e-tailers.”

Nagesh exudes confidence there will be a great collaboration between local traders and online players. “If you look at the way Amazon Pantry is functioning, Jio, Flipkart’s tie-up with kiranas, everybody is looking at making kiranas part of their eco-system. And that is the beginning of the new revolution that will happen in India. It will be completely different from any other part of the world,” he said.

“On the other hand, if I have to speak on behalf of these traders or their association, there is no way they can work on protectionism. They can’t say don’t bring Amazon, don’t bring Flipkart or else we won’t survive. Without e-tailers’ support, kiranas won’t survive any way. The next generation shops online 24x7,” Nagesh added.

The former Shoppers Stop Chairman stressed on the need for retailers to adapt themselves to the new way of shopping to survive. Requesting the government to introduce restrictions to protect them is not the right way forward, he sought to point out.

“It is important at this point of time for all of us (retailers) to convert and I see an opportunity where there are possibilities for retailers and e-commerce sites to converge and there are lots of companies in this country that are helping them do that,” Nagesh said.

On the possible entry ofWalmart and Jio-mart and the impact on small brick and mortar stores, he added, “Walmart entering the market is an opportunity. The kirana stores should see it that way. Walmart is not into retail in this country, but into cash and carry and it is allowing a distribution channel which is servicing you on an everyday basis rather than a distributer of an FMCG who services you once in three months.”