Foreign direct investment (FDI) in multi-brand retail may have turned into a hot potato for the United Progressive Alliance government, forcing it to put the reformist decision on hold, but industry gurus now say online commerce would pose a bigger challenge than FDI for traditional retail in India.
And, why not? Online books major, Flipkart, is aiming to be the biggest retailer in India. Travel portals are already doing a third of the total domestic flight bookings, and the biggies agree that online retail in this category will be on a par with offline within 10 years. A start-up online jewellery outlet now targets a turnover of INR100 crore (INR1 billion, USD18.8 million) within 12 to 15 months of launch.
All this, perhaps, prompted Arvind Singhal, founder and chairman of Technopak Advisors, to call online shopping – in an interview to Business Standard – the biggest disruptive force for organised retail in India. He cited the closure of 4,000 megastores in the UK over the past seven months due to the growth of e-commerce.