 "Riding on mobiles: Online-only sales give brands the first mover advantage")
It seems like electronic brands are divided on how they see the burgeoning online retail industry in India. On the one hand, a few electronics brands have issued statements in the media stating that the products bought online will not cover the warranty, and on the other hand a slew of other electronic brands have chosen online platform over brick-and-mortar shops to launch their new products.
Even though both are two separate issues, we can’t ignore the fact that such decisions will affect the long-term relationship between e-tailers and electronic brands. Companies such as HP, Asus, Lenovo, Nikon, etc have warned online retailers such as Flipkart, Snapdeal, Amazon, etc. about not honouring the warranty for their products sold by them.
However, in the past one year electronics companies such as Sony, Micromax, HP, etc have tied up with online retailers to exclusively launch their new products. Motorola launched its three new smartphone models which were sold only on Flipkart.
“The success of Moto G validates that our strategy was spot on. Many more people are now using e-commerce (to sell devices) and many more will come on board. We have the first mover advantage,” Amit Boni, General Manager of Motorola India, told PTI in August 2014.
Michael Adnani, who takes care of brand alliances at Flipkart, said online first approach is appealing for brands of all categories as “it cuts the cost and effort of brands to reach people across the length and breadth of the country through just a single platform. There are more and more people getting exposed to the Internet and online shopping. Access to internet-enabled smartphones is also adding to the e-commerce wave.”
Flipkart also assists them on market intelligence that helps them decide on prices and offers that appeal to customers.
Not just electronics
In October, Manorama Year Book launched its 50th anniversary edition exclusively on Flipkart, and in August, Amazon won exclusive rights to sell Microsoft’s Xbox. Experts, however, say a brand’s online-first approach is a short-term marketing gimmick and is used only for specific product launches, catering to a specific target audience and limited to the online platform.
“Right now a lot of it is driven by the smartphone demand. I am not sure if the brands in other category will do it, because they will miss a lot of bigger opportunities. That space is perforated with many other brands, so it may not work for them to ignore offline retail,” said Ankur Bisen, senior VP, retail & consumer products, Technopak.
Online players swear by the success of exclusive launches and the possibilities it opens up for brands and buyers alike. “We feel that exclusive launches indicate the future trends in e-commerce. With more and more brands listing on online sites, and some of them, like Moto G choosing us as an exclusive distribution channel, e-commerce will become the default shopping option for customers,” said Michael Adnani,VP, Retail, Brand Alliances, Flipkart.
Wormhole for international brands
As much as the online retailers help Indian brands reach a broader customer base, it’s proving to be a wormhole for international brands to launch in the Indian market.
“We see the products of international brands in the hospitality sector like in hotels, but it was never available for consumers to buy, which is now possible due to our association with them,” said Vikram Chopra, Co-founder, FabFurnish. FabFurnish is an online home store that sells furniture, kitchenware, etc.
This model excludes middlemen which makes it even more lucrative for brands to. “This helps in getting products faster to the consumer and minimizing inventory-related costs. By selling through online retailers, brands boost their ability to offer attractive prices to shoppers as sites take care of all the logistics and supply chain work for brands,” said Nilotpal Chakravarti, AVP, Internet And Mobile Association of India (IAMAI).
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