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Godrej eyes Rs 100 crore from ecommerce venture with Indiatimes

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The e-commerce industry is estimated at a value of Rs 40,000 crore and out of that Rs 60 crore is contributed to by the home appliances segment. Taking a cue from this trend and amplifying access to its consumers, Godrej has partnered with Indiatimes Shopping to give the consumer a new experience in the virtual world. The strategic alliance has launched an exclusive online store only for Godrej appliances that is targeting a turnover of Rs 100 crore in the next five years.

According to a recent Forester report, 111 million people are online in the country with 17 million daily users, which amounts to a $1.6 billion industry. This is expected to grow to a whooping $8.8 billion by 2016. Most users are from the age category of 20-35 years who make purchases online and amount to 7.4 million users that have purchased a product online.

Virtual is the answer?
Godrej claims to have about 500 Stock Keeping Units (SKUs) across 31 locations from where the products will be sourced online. The company believes that the online industry in this sector is looking at a 250 per cent growth every year. The biggest challenge that Godrej threw light upon is ‘the face of the brand’, which is the shopkeeper at touch points. By launching this online store, the brand plans to bring the same face online.

Kamal Nandi

Kamal Nandi, Excecutive Vice President Marketing and sales, Godrej Appliances

Kamal Nandi, Executive Vice President, Marketing and Sales, Godrej Appliances says that the brand is positioning itself as a pioneer in creating online exclusive brand store. “I think our whole intent of partnering with Indiatimes shopping is that they are a recognised player in the online space and both of us coming together we will be able to create an exclusive experience in that space,” he stresses. Godrej targets Rs 15 crore in the first year, which the company expects to grow to a Rs 100 crore business soon in the e-commerce space. “In the immediate quarter we are targeting Rs 3 – 5 crore turnover due to the festive season where there is major purchase,” Nandi adds.

But how is it going to be different from the usual e-commerce websites? Has Godrej been able to break the clutter? Nandi explains that most of the brands today are running businesses that are not directly associated with the e-commerce website. “They are taking services from the distributor and what is important today is the assurance to the consumer from the brand in this space. Therefore, when a trusted brand like Godrej and Indiatimes come together I think there is assurance for the consumer in the online retail space,” he adds.

Talking from a pure e-commerce point of view Subhanker Sarker, Chief Operating Officer, Indiatimes.com, explains how this venture is different. He says that this is an important piece in its strategy as it believes that with the growth of e-commerce, there are many credible e-commerce offline brands in different categories willing to enter the virtual space. Both e-commerce players tying up with dealers as well as brands directly will co-exist. As the scale increases in e-commerce, more relationships will be built with the brand and not their channel partners. This is an independent potential, large channel and therefore it makes sense to be in direct partnership for most brands,” thinks Sarker.

Subhanker Sarker

Subhanker Sarker, Chief Operating Officer, Indiatimes.com

Before Godrej, Indiatimes had tied up with Nokia and claims to be in talks with one of the largest jewellery stores for a similar venture. “This covers different categories and in times to come we will collaborate with leaders of different categories,” adds Sarker.

Amplifying  experience
What stopped Godrej from entering into an agreement such as this earlier, with its online stores such as gojiyo.com and godrej.com already existing in the market? Nandi feels the biggest challenge in the online space has been the absence of the experiential element. Consumers have not being able to get the touch and feel of the product that they purchase, therefore, one does not find many consumer durables being sold online. “To work on this challenge what we are trying to do is create an appliance experience of usage online. For example if you go to a store to buy a product, you see the product in physical shape you read the catalogue, know what it is supposed to deliver and go ahead and buy it. Godrej through this platform is going to show the consumer the product and give them a demonstration of how the product will be beneficial. Very clearly this will be the USP, consumers are going to experience the product firsthand,” adds Nandi.

Sarker says that Indiatimes brings in a credible brand store that is nationally available to the consumer and which is accessible from home 24×7. It also promises the best immersive experience online and the best consumer experience till the last mile fulfilment. “We provide the expertise of doing business online and Godrej provides the brand and product, and ability to distribute across the country,” Sarker appends.

What has been generally seen is that when a consumer looks for a product across any category, the consumer begins with the search on the internet. Reviews, comments on social media as well as the internet penetration are factors that influence the buy. Sarker says, “There is a CAGR of 50-55 percent that has been seen on the ecommerce platform and is driven by internet penetration, search and social media.”

Given that the industry is growing and there are a lot of players in the category, what has shop.godrejappliances got to offer that is unique in terms of product differentiation? Nandi says that the brand will be giving a lot of value ads that will be launched 15 days prior to the store launch. The designer products will be only available online and not in the store as the store has a mass based approach. Godrej also eyes a 150 per cent growth year on year with its online store that will give value propositions to the consumer such as, buying advice, purchase guidance, usage guidance, AMC, maintenance support etc. The online store has all modes of payment except the Cash on Delivery (COD) system and as Sarker points out, 30 per cent of the industry thrives on COD. Will this be a drawback? The brand thinks otherwise and feels that other schemes including an EMI structure will suffice.

Linking online presence
Indiatimes claims that the product is built in a manner which will be in line with what the appliance business needs. Marketing is about driving traffic with propensity to buy, so it will be a relevant 360-degree marketing which drives traffic to this site. “Godrej has other online properties such as godrej.com go joyo.com, which have a buy button which will redirect to this website,” says Sarker.

Godrej has a different promotional tactic, Nandi explains that in all of Godrej’s communication, whether it is print or any media, it will be inviting the consumers to use the site and shop on this site because this site will offer the consumers more value than that they can get from the market. “Focus will be both ATL and BTL with the on-ground activities including, point of sale promotions where people can visit our site and a lot of promotion will happen in the virtual world, the ‘Facebooks’ and ‘Twitters’ where we will advertise. We have our own Gojiyo site where we will be talking about this venture and try to create as much awareness as possible in the virtual world for our consumers,” appends Nandi.

But will the consumers really use the medium for such purchases or still stick to the touch and feel aspect of the non-virtual stores? “Consumers are apprehensive because they are not getting the touch and feel, they are not very sure that they will get the same benefits when they purchase form the store. They are not sure if their purchase will be recognised and they are going to get the same service after the purchase from an online platform. If we are able to ensure a better experience of consumers online then they will come forward,” Sarker sums up.

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