Retail is an industry where it is all about detail. Hypermarkets around the world are always large boxes on cheap real estate, on the edge of big cities with good infrastructure where customers happen to come and shop at least once a week or once in 10 days. The consumer is prepared to buy food, apparel, and electronics, and put everything in the same trolley. This model is not applicable to India.

Hypermarkets in India will not be the scale of hypermarkets elsewhere in the world. They could be 55000 sq. feet size for tier II cities and 75000 sq. feet for tier I cities.

In smaller cities, they find large well-laid out store intimidating. As a brand, one can be considered premium or price sensitive. A crisp looking store is given elsewhere. It is not considered expensive. A hypermarket can lower the prices by subsidising the prices of food items from the margins of the non-food items. It is an efficient format.

The way goods are traded and bought is being redefined by the digital commerce. In scope, digital commerce matches the telecom revolution a decade back. Online retail is a natural evolution from unorganised mom-pop stores, to mass retailing from the malls to digital commerce now. In fact, online trade brings the small sellers, retailers and artisans to the customers directly. The access is the same—whether you are in the urban areas or the rural areas. Apart from the sellers and buyers, there is a growth of logistics and courier companies. Brick-and –mortar stores can co-exist and thrive. In fact, most of the brick-and- mortar stores have developed omni-channel capabilities. Online stores are convenient. They do offer a large variety. In India, the focus on just discounts is misplaced. It should be on convenience and variety.

 

Open Market-Place ( OMP )  is a technology-based asset light model. It merely hosts sellers of new, and in small percentage, used goods and connects them to the buyers. E-bay has adopted this model. It does not handle logistics beyond alerting its partners in this space by an automatic process. When goods move from buyers to sellers, they do not pass through an e-bay warehouse. It is based on trust. It is suitable for a mature eco-system. It is It is merely a hosting platform.

Managed Market-Place (MMP )

It controls delivery and returns and does not deal in used goods. It helps to control customer experience and is more suitable for India. In this model, the e-retailer does not own the products but controls delivery, quality and returns.

Inventory-led Model

The e-retailer here owns the inventory and controls delivery and quality too.