Wings expansion in market by E-commerce.

Shopclues, Flipkart, Snapdeal, Amazon – these are some websites which are browsed and used by a computer savvy person almost every day. Online shopping has become very popular among youth and professional generation in recent years and more than 60% of retail market is captured by online shopping. It’s very convenient for people to browse the desired product and compare with other similar products and getting it delivered at their door step. There are very lucrative offers from various online retailers to allure the customers by providing reward points of any freebie with the purchase made. “I don’t need to go anywhere and consume my time in selection and buying any product, so most suitable way to get my need is to get it online”, says an executive of MNC and he is not the only person having same tendency.

All major retailer have understood the impact and presence of online business opportunities and heading towards moving into the most popular ‘E – commerce segment. The head of Future Group, one of India’s largest and most established retailers, admits he can’t keep up with web sites like Snapdeal and Flipkart when it comes to spending money to entice shoppers to buy online. Private investors have poured $2.3 billion into India’s e-commerce companies so far this year, according to consulting firm Technopak, giving them financial firepower to overwhelm shoppers with bargains and deals that brick-and-mortar retailers like Future Group, which runs a host of chains including Future Retail Ltd and Future Lifestyle Fashions, cannot match.

In an attempt to match up, traditional retailers are forging partnerships with well-funded websites such as Flipkart.com, Amazon.com Inc and Snapdeal to put their wares on the web without investing heavily in their own online infrastructure. This tentative approach to e-commerce, however, leaves traditional retailers vulnerable to being completely overtaken by their better-funded online rivals in a country where a rapidly expanding middle class is doing more and more shopping on the web.
In October, Future Group tied up with Amazon’s Indian arm to sell its brands online. A month earlier, electronics retailer Croma, owned by the Tata Group, struck a similar arrangement with Snapdeal.

India’s protectionist government policies have long shielded established retailers from competition. As a result, they never felt the need to invest in state-of-the-art technology, said Bhavit Desai, a U.S.-based strategy consultant who has worked with companies such as Walmart International, the global unit of Wal-mart Stores Inc, and Target Corp.
In 2012, then Prime Minister Manmohan Singh’s government opened the retail industry to foreign operators, allowing companies such as Wal-Mart and Tesco Plc to own majority stakes in Indian chains for the first time but the government left it to individual states to decide whether to let in foreign retailers. Few have stepped up, and the big foreign chains that might have shared their online expertise with India’s stores are largely absent.
Instead, local online marketplaces have proliferated, backed by billions of dollars coming in primarily from abroad. Last month’s $627 million investment by Japan’s SoftBank Corp in Snapdeal illustrated a widening gap. The portal has also attracted funds from eBay Inc and billionaire Ratan Tata.

Flipkart.com raised $1 billion earlier this year, in a round of funding from Singapore sovereign wealth fund GIC, along with existing investors Tiger Global Management LLC and South African media company Naspers Ltd.

Organized retail is still developing in India. More than 90 percent of shopping is done at informal roadside shacks and in bazaars. These small shops are seen as the lifeblood of the economy and successive governments have protected them.

But the same policies have also shielded much larger players like Shoppers Stop Ltd, Future Retail and others. At the same time, online stores are racing ahead, modernising the retail industry at a pace that traditional chains cannot match.