Spurt in online shopping cripples festive retail trade in Hyd

Hyderabad: Upending norms, the spike in online shopping crippled retail business in Hyderabad even during the just-concluded Dasara festival. Cloth merchants, garments showrooms, groceries shops and retailers of electronic appliances, among others, could not register their expected turnover, though they were expecting a significant increase in their turnover in view of the sentiments attached to purchases during Dasara. The week-long Dasara festivities hardly made a difference to them.

Traders are worried that their business, already hit by portals enabling online shopping in normal days, did not improve even during the festival period. Many of the loss-making retail units were hoping that Dasara-Diwali festivities in October will come to their succour.

The Hyderabad Merchant Association members said that the turnover during Dasara period would usually be three times more compared to that registered in normal days. However, over the last two years, online shopping has boomed in Hyderabad, with traditional retailers bearing the brunt. The business of each cloth and garment retail shop came down to 30 per cent last year and to 40 per cent this year. The big garment showrooms in the city are also facing tough competition from portals enabling online shopping. As a result, the showroom managements announced competitive offers to beat online sellers during the entire festival season. “Retail trade is like the release of a star hero movie which hits the theatres and rakes in moolah through a positive talk in just a week’s time or incurs huge losses with a negative comment during festival time”, Hyderabad Merchants Association Secretary Ritesh Sadh said. He said that the big challenge before the traders is to offer affordable prices to the consumers that are less than the ones offered by shopping portals. If the consumers feel that the product is costly in the shops, they immediately shift to online sellers. Grocery sales have also been hit hard in retail shops as many online players announced festival discounts on every product, particularly milk, sugar and other food items that are much sought-after to cook special festival recipes.

The 50 per cent discount on many food products offered by the online traders during the season almost killed the retail grocery business in the city. Except in slums, retail grocery shops are vanishing fast in most upscale colonies, where people prefer to order online every product used for regular consumption as well as for festive delicacies. It is estimated that retail grocery trade business went down 40 per cent this year.

The managements of retailers of electronic appliances are also facing trouble from the increasing domination of a few big showrooms and online players running famous business portals, Rithesh said. He said that big electronic showrooms, already facing a tough situation to sustain their business amid online domination, registered only 20 per cent growth in sales this year, compared to that registered last year. Small retailers in electronics business are on the brink of collapse as it is crucial for them to achieve 50 per cent of their targets during the Dasara-Diwali period in Hyderabad.

“Reducing profit margin and shop maintenance is only the option to sustain in the competitive business unless there is a control on the exploitation of the business by portals enabling online shopping”, an association member said.