Retailing and E-tailing

Retailing & E TailingOnline shopping THRILLS but KILLS. Yes it kills the patience inside you to wait for the product until you receive your order to your doorstep. We as customers know the story of the purchases that we make. And we think the retailers and e-tailers make a huge profit. But what’s the real story? Let us have a glance on the performance of retailing and e-tailing.
Mr. P.K. Mohapatra spoke to us on the position or retail and e-tail sectors in his last lecture. He told us how the consumers are inclined towards E-Tailing for their purchase. He taught us the concept of e-tailing through the history of retailing.

Before getting into the details of E-tailing and their survival in the market we need to understand how retailing has been working all these years.

Our country has the largest number of retailing outlets in the world. The reason behind this being modern retailing came up very late in 1997 when the government allowed foreign direct investment(FDI) in cash and carry wholesale. Though modern retailing started 18 years back, the growth of the organized sectors happened only 5 years back, largest being reliance Retail followed by the Future group and Aditya-more market. Modern retailing grew in India rapidly last 5 years because customers convenience in buying.

Mr. Mohapatra also gave us an insight on how manufacturers support small shops over major retailing shops. Manufacturers have more advantage over the Kiranas compared to Retailers as the supply of products is comparatively lesser than the retailers. Retailers over power manufacturers because the demand of products is higher. Manufacturers also cleverly use the bundling tactics with the retailers to release less profitable products.

Retailers sell their products at 30% above the cost price. But the profit margin is only around 1-2%. How is that possible? The other expenses that contribute to less profit margin are:
• Rent and inventory- Around 10%
• Man power-5%
• Electricity- 2%
• Hardware/software-3%
• Marketing-3%
• Distribution-5%

This totals to 28%. One of the noticeable expenditure towards consumption of electricity is the freezers where cold and frozen foods are stored 24*7.The profit margin for groceries is based on sales in volumes and not through high or low pricing .We might think 1-2%margin is very less but with higher volume and sales the amount piles up. In retailing sector the highest profit margin is incurred by Horology shops and Antiques shops but they are the slowest selling sectors. The fastest with least margins comparatively are super markets and Kiranas.

After giving us a fair brief of Retailing sector,Dr .Mohapatro moved to explaining the current trend- E-Tailing.
E-Tailing concept came up with the idea of hiding space costs to achieve higher profit margin. Less did the E-tailers know that it would cost them so much.
– They will not only run the whole operation thru cloud computing but they have to pay the cost of maintenance, ware house cost and the logistics cost.
– They have to pass more benefit to the consumers because of competition.

The first wave of E-tailing was a complete disaster which lasted between 1995-2000. “Webvan .com” the first e-tailing site could not manage its expense leading to a huge loss. HamaraCD.com was another Indian website for music which had its slow death.

While books were an expensive affair in the brick and mortars, Amazon launched in 1995 promised to stock an almost unlimited virtual warehouse. Amazon got its first profit in the year 2001, 7 years since its launch. E-selling books turn out to be profitable so far leaving retailing book industry die slowly. While books contribute to the profit, electronic items like refrigerator, washing machines and furniture incur more cost than the selling price contributing to loss .The transport and delivery costs are so high that the profit of the ecommerce site depends on other items which contribute to profit. Analysis shows that websites like flipkart, Jabong ,Homeshop18 and other big ecommerce sites hardly make any profit but investment is huge. It takes a minimum of 5 years to achieve a minimum profit.

There is a huge competition between retailers and e-tailers. With e-tailers promising quick delivery for groceries, Retailers have also come up faster deliveries with groceries using web as a medium. Earlier we could differentiate Ecommerce and retailing. But things are changing. E-tailers and retailers are either merging or retailers are opening up their own ecommerce sites. The expense and investments have increased but growth and profit margin remains stagnant. To increase profit margin, one of the ways is to faster the sales and high volume. Collaboration with retail or other e-tail could also be beneficial.
However with the competition between e-tailors and retailors, the consumers are getting benefitted by
– Getting better price
– Having many choice
– Getting at their doorstep
– Visiting many online shops for getting best buy

— Neetasha Patnaik (CBS 2015-16 batch)

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5 facts about Indian villagers which brush away conventional thoughts

Chennai Business School Rural Marketing Field Trip 2015

What comes to your mind when you think of Indian villages? Bullock –carts, women balancing pots on their heads, farmers singing folk songs and children running behind all cars they see. Gone are those days! Students of Chennai business School conducted a field study on the rural lands of Pallavada. So be prepared for a whole new thought about villages, when you read the facts below.

Fact 1: They are interested in buying cool stuff as much as we are

We met a guy in his late twenties wearing a Fast track watch and carrying a Motto G. “Korean?” Asked one of us, but to our surprise he replied Flipkart. Wow! Isn’t it? When prodded further, we came to know that the villagers here, though void of the internet, get to know about new products and services through television. Most of them, though price conscious, want to own or buy some of the apparel, deos and watches advertised on Television. Imagine! If there was internet penetration, the potential of this ‘bottom of the pyramid’ village.

Fact 2: No more slates and chalk pieces

Let’s teach children math, was my thought when all of us walked into the local school here. But, we saw children screaming two tables.  Instead of slates, we saw them write in their maths note-book, just like us during our kindergarten days, though they had no benches and were sitting on the floor. In fact, unlike urban schools, this government institution also takes in ‘special students’ and has teachers from Aganvadi, who come in to train them. Now that sets an example!

Fact 3: Mobile Phones? Two- wheelers?  Yes of course.

What’s the mobile phone you have? Nokia, the fisherwoman replied showing her Micromax phone.  Yes, they are unaware of the brand they use. But, come on! 80% mobile penetration is awesome. Most of the folk in the village use Aircel connections. The youth here access social media through their smartphones. Regarding bikes, TVS Splendor is predominantly seen parked across their tea-shops, bakery and the Kirana outlet. But all the outlets here haven’t been touched upon by time and are still the same like what you see in movies.

Fact 4: They are bitten by the shopping bug too.

Yes, Pallavada village folk shop at Madharpakkam, a tier 2 town nearby. Good nah? They buy apparel, jewels, medicines (bad they don’t have them at Pallavada), FMCG (who shops at ration stores these days anyway), etc. So, they are shopping enthusiasts like any of us and desire greater access to most of what’s mentioned above in their own village; for instance, the post-office at Pallavada still doesn’t have e-post; while people here courier from Gummudipundi.

Fact 5: Some things haven’t changed.

Medical facilities have to be improved upon and the school here doesn’t have computers for children to access. These are typical, like any other village you have seen. So, in-a-nutshell,

‘Village folks want to move on and embrace the changes, but the village still has to change in many  aspects’

— CBS 2014-15 Winter batch

 

 

 

 

 

 

 

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Teachers’ Day Revelry @CBS House

The significance of the function is to show respect to our Gurus who dispel darkness and ignorance in and around us. Teachers give light to the life of students. They sacrifice their life, soul for the upliftment of the students by imparting not only knowledge but also wisdom. Knowledge can be obtained through books, novels, newspapers and the internet. But students can acquire wisdom only through teachers. As wick in the lamp, the teachers sacrifice themselves to brighten the lives of the students.

It is always teachers who have fun looking at students competing with each other but this time it was our turn watching our teachers having fun and competing with each other.

To thank them for their patience and wisdom they disseminated, students of current winter and summer batch of CBS conducted teacher’s day on 4th September 2015.

Our professors were given a warm welcome by a cake cutting ceremony with a background music. The celebration started by dividing the teams in 5 and the respective teams were headed by Prof.Sridar, Prof.Venkat, Prof.Arun Nair, Dr. Mythili and Prof. Anish.k.Ravi . We had activities like

• Antakshari
• Placing color gems in cups with straws
• Felicitating teachers with thanking notes and gifts.

And the winner of each activity was given a diary milk chocolate. Though the winning prize was small, they received it with a huge smile on their face.

Each faculty were gifted a rose with a memento. And the students of both winter batch and summer batch enjoyed themselves a lot. It was a treasured moment for all the faculty and students. Ms. Bhavani — the Public relation officer of CBS — quoted saying that “this is the first year I am invited for a teacher’s day celebration, I am very happy about this”. It was an emotional moment for us all.

Finally, as an end to the function, both the winter and summer batch students took a selfie with our dynamic and smart Prof. Anish.K.Ravi which was a proud moment for all students.

“The best teacher is one who suggests rather than dogmatizes and inspires his listeners with the wish to teach himself.”

Elavarasan (CBS 2014-15 Winter batch)

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