E-commerce websites have totally changed how the Indian market works. It has changed how companies approach their market plans and how foreign companies come to India and operate. The market before was a fist fight between companies selling their product but now there are different dimensions. Every company has a different dimension to aim at and there are two markets to play in; an offline market and an online market.
However, since online markets were introduced, many companies shifted to that market and have offered aggressive prices as there are no middlemen to pay to. This has hampered the offline business and vendors to a great extent. The online market offers different things at different prices, people do not have to leave their houses and visit different shops, they just have to browse and this gives an immediate advantage to the e-commerce websites.
The offline vendors thus had a lot to do and they were always losing the battle. Companies like Xiaomi, Oneplus, Oppo and many others kept the majority of their share for the online market. Their phones never reached the stores and when they did, the discounts on offer were better online and they lost their customers. There are companies such as OnePlus which exclusively sells its devices on Amazon and have recently agreed to sell it via Croma.
This caused a lot of ruckus amongst the offline tech stores. There were a lot of protests and strikes taking place. After all, they are also trying to make a living and are a viable source to sell the same product. Even they contribute to the Indian economy no matter how minute it may be. That said, the government has listened to the protests and a decision came out as recently as this week.
Department of Industrial Policy and Promotion announced a new policy for the companies selling online. The new policy claims that the companies can, from February 1, sell only 25% of their products online. The rest of the products should be sold via the brick-and-mortar stores. This news comes as a huge boost for the offline retailers as there will be exclusive deals coming their way as well.
However, this is a huge shock for Chinese companies such as Xiaomi, OnePlus, Huawei’s Honor and also Oppo’s realme who have exclusive deals with e-commerce websites. Xiaomi, India’s best smartphone seller owes 70% of its market to the e-commerce website. In 2018, it shared 28% of the market and in the second place was Samsung which took 23% of the share. These were the two companies competing in the sub-continent country.
That said, Samsung will now look to pip Xiaomi for the first spot. This is because of the new policy because Samsung is deeply rooted in the Indian market and has a number of channels in the offline market. Xiaomi will have to find new homes in the offline market as it is going to struggle to do so. Samsung, in the meanwhile, can dominate the market as they have already laid the pipeline throughout India. February 1 is the deadline for Xiaomi to find vendors and ship their upcoming phones or they will lose share.
– Unmesh Phule