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Online Retailers Activating the Brick & Mortar Channel

Saroj Javeri, PGPB4

We all have been hearing of multiple brick & mortar Retailers jumping onto the e-commerce bandwagon in India. Given that the e-commerce industry is poised to breach the USD 100 bn mark by 2020 from current revenues of USD 23 billion for 2015 (as per a report by Goldman Sachs), establishing an online presence seems to be the logical strategy for any retailer aiming to maintain/increase revenue and volume targets.

But within this melee of e-commerce transition, I surprisingly came across e-commerce companies that decided to activate the brick and mortar channel and that too by establishing single store outlets! Established in 2010, Chumbak, which houses 75 categories is one of them. Chumbak seems to have played its cards right; it tested the market by selling via Facebook and proceeded to establish an online presence. Regarding physical presence, the company initially started with kiosks in malls which evolved to shop-in-shops and set up its first large format flagship store in September 2014. It currently has 15 large format stores and 19 Popup stores across ten cities in India to its credit and is gearing to hit the INR 400 crore revenue mark shortly.Chumbak has successfully raised USD 2 mn via seed funding followed by a series-B funding from PE investors and has developed a mobile application for Chumbak loyalists! Vivek Prabhakar, the founder of Chumbak, believes that physical stores helped them showcase products and built brands while an online presence aided in getting instant feedback which was used to improve products.

Another online retailer that catches the eye is Lenskart, the seller of optical products which has 100+ retail stores across 66 metros, tier I & II cities in India under the franchise business model. Backed by an INR 200 crore funding, the company aims to expand to 2000+ stores across India.It seeks to tap traditional offline customers who prefer to visit an optical store to make a purchase and thus expand customer base, get repeat customers and increase revenue and brand recognition.

Other online retailers like Yepme, Flipkart, Snapdeal, PepperFry and Firstcry are amongst the first movers to open offline stores.The omni-channel model, a healthy combination of both offline and online presence indeed seems to be the modernretailer’s mantra to success!

This article is written by PGPB4 student Saroj Javeri.


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