Online retailing of eye-wear in India

FOR IMMEDIATE RELEASE
(Free-Press-Release.com) February 21, 2012 --

E-commerce is witnessing resurgence in India post dotcom bubble burst which brought a new realism to the internet economy and forced many e-commerce firms to close down their shutters. E-commerce this time, however, seems to be here to stay for much longer time as ecommerce companies are selling real goods and services online that customers are paying money for. It has already become a multi - billion industry due to explosion in the use of the Internet which has over 100 million users despite poor penetration and sluggish speed. This is a big number as it makes India the third largest internet market in the world by number of users. The number also assumes significance in the light of the fact that there were merely 50 million internet users worldwide in 1997 when the world's largest online retailer Amazon.com went public.

E-retail is one of many applications of e-commerce which provides an interface from businesses directly to their consumers. It has grown with the rise in the number of internet users in the country to become Rs. 2700 crore industry by the end of 2011. It has high relevance for companies following B2C model given the fact internet is now clearly and firmly a small town phenomenon and its usage is not limited to rich people. The trend among internet users to spend long hours online has also made e-retail an effective tool to target customers. Moreover, the realization of the fact on part of business houses that it is much more cost efficient to give customer an option to buy online than to open a physical store has led to the successful launch of e-retail ventures. The sector is now flushed with funds from venture capital and private equity investors giving fillip to already booming industry.

E-retail of eyewear is a very niche segment and is an underserved market. It is comparatively a new phenomenon in comparison to developed markets where it started almost a decade ago. Indian eyewear industry in global terms remains underdeveloped with Indian market accounting for about 1% of the world’s consumption. It is estimated that 35 per cent of India’s population are in need of vision correction and only about 25% of people have their vision corrected. However, the situation is changing rapidly in favor of e-retail due to multitude of factors like evolution of retail in India towards organized, branded purchasing; increasing customer awareness, secure payment gateways; and rapid growth in internet penetration and its usage among people in the age group 16 – 35 years.

Customer purchases for eyewear has also witnessed noticeable shift in form and function to form and fashion. It is now seen as fashion accessory and is witnessing a boom as consumers try to look a little more different from each other. The emphasis is now more on the look of the glasses and the image the customer seeks to create. Growing consumer awareness about global fashion brands, coupled with rapidly growing income levels is also stoking the demand for high quality premium branded products among Indian customers. In this scenario, e - retailing has emerged as an alternative and reliable option for customers due to features like unlimited choice, anywhere access, free shipping, cash on delivery, interactive sites, transparent and better pricing etc. It is complementing the already existent physical retail stores and is playing a crucial role in the expansion of eyewear industry that was dependent primarily on the physical stores for its growth.

Though the growth of the e-retail site in the past one year has been stupendous, it is mired by challenges too. These include high duty tariff on optical products which is leading to price gap between branded and unbranded products, thereby, discouraging customers from buying genuine and quality international brands online and approach grey market. Logistical challenges also come in the way of serving customers in far-flung areas leading to higher delivery cost. Other challenge area is low success rate of payment gateways that generally fail due to large number of transactions. Constant technology updates and security challenges are other major deterrents to the growth e-retail industry as it is taking its toll in instilling customer confidence while transacting online. Privacy issues, lack of robust customer care department and lack of option like examining the product physically before purchase especially for a product like eye wear are some other major challenges faced by e-retail stores. Also, Indian customer not used to the concept of online shopping system and credit card is posing a great challenge to the growth of e - retailing in India. Another challenge is to instill confidence among the customer that the products that they have ordered would reach them in due time. Eyewear e-retail stores are addressing these issues with interactive websites (equipped with features like face shape guide, try on virtual mirror), free shipping and cash on delivery etc. thus instilling customer confidence in online transaction. Offline presence of online retailer is also playing a crucial role in enhancing consumer confidence and is providing them the psychological comfort that the e-retail site can be relied upon. Language is another barrier to the growth of the e-retail in India as English is not comprehensible to the majority of the Indian population thus making it mandatory to provide content in local language in the online retail shops.

Many e-retail portals in India are venturing into physical retail space to give fillip to their fledgling e-retail venture as a natural next step. Their physical stores are playing crucial role in instilling consumer confidence in e-retail especially among customers of Tier 1 and Tier 2 towns that account for significant portion of the orders. There is also an emerging trend of customer showing preference for niche e-retail portal over general e-retail portal in areas like eye wear that require expertise. This explains the success of niche online stores for eye wear, baby care products etc. in India. There are ample cases across the country where people from distant location like Jharkhand, J&K and Odisha are ordering premium optical product online and are satisfied due to accuracy and faster order delivery; trendy and comprehensive product range and high service quality.

As Vijay Patnaik of Odisha who is a first time buyer at www.gkboptical.com puts it, “I was very skeptical about purchasing glasses over the internet; but I feel much more comfortable after I received my order that was exactly what I was looking for and was delivered to me even faster than I thought I would. They fit better than any glasses I've ever bought and are trendy and a masterwork indeed. I've never been able to find such a comprehensive range of sunglasses, and they all are terrific. I am very satisfied with your company and would recommend it highly.”

Despite the challenges the potential of e-retail of eye wear in India is too big to ignore as domestic consumption story of the country remains intact. It is well poised to flourish along with the physical retail business, as there is enough space for both e-retail and non e-retail business to grow especially in the eye wear space. Both physical retail and e-retail have their clear benefits to customers and they are complementing each successfully thus instilling confidence among Indian consumers and investors alike. Buoyed by the success of e-retail ventures, venture capital and private equity investors are putting their money in the sector giving staying power to the incumbents who now can pursue their growth strategy with single-minded focus.
E-retail will become a significant mode of purchase among consumers for eye wear due to its benefits and it is only a matter of time before Indians begin trusting the online shopping space for purchasing optical product

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