It looks like e-commerce cannot survive without brick and mortar shops

E-commerce was touted as an existential threat to traditional small stores in India.

But as it turns out, the story is a different one.

Leaders in the marketplace platform like Flipkart and Amazon have been piloting services where they deliver products to your home from your local stores for quite some time now. Moreoever, online sellers setting up offline stores have become a strategy that is crucial to the success of the start-up. 

The latest e-commerce start-up/company to realise this is Yepme.

The company is looking to begin 400 outlets by the end of current fiscal year, PTI reported.

According to the report, “The Company, which has opted for omni channel growth by recently opening four stores in Gurgaon, is aiming to have its presence in around 550 district of the country in the next 4-5 years.”

"By the end of this year (FY 2016-17), number of retail stores will be 400, which would be around 600,000 sq ft," Yepme CEO and Co-founder Vivek Gaur told PTI.

He further said, "Out of this 400 outlet, 20% will be metro and rest all in small scale town".

Before Yepme, Lenskart.com also forayed in offline store market.

Online start-ups like Pepperfry, Flipkart, Zivame and FirstCry, too, have ventured into the “offline” store model.

"Today, anyone can open an online store. Where is the quality audit?" asked Richa Kar, founder of Zivame, an online lingerie company that plans to open 100 stores in the next three years. "Physical stores will help us deal with the credibility issue," she told the Economic Times on December 2, 2015.

"We spend Rs 8-15 lakh per month on a store. For a large hoarding, it will cost us about Rs 5-10 lakh per month, depending on the location. So, we opened studios where customers can experience and not just recollect the brand," said Ashish Shah, founder of Pepperfry.com, said in the same story.

Even though e-commerce in India is growing at a scorching pace, customer preference for the “look and feel” of the product is making companies look at physical stores.

The logistical issues like delivery of products in the small towns is also a cause of concern given the large demand emanating from India’s tier 2, 3 and 4 cities.

A report by Google and AT Kearney said that online retail will account for one in four sales conducted in India by 2020 and gross merchandising value will be at $60 billion.

The total number of online buyers are likely to increase to 175 million in the coming four years.

However, the report did say the need of buyers to see and test the product before buying.

Techstory.in, in a report dated June 1, 2016, quoted the research as saying, “Omni-channel presence will become very important in Home & Furnishings, Lifestyle and Consumer Electronics category to serve the need-gaps of non-buyers. In home and furnishing over 60% buyers wanted retail outlets to be able to see and test the product before purchasing. In lifestyle, 40% respondents said that offline stories will help in alterations of clothes and for consumer durables 60% buyers wanted salesman guidance for installing and using the product.”