Merryl D'Silva is elated these days. For, the public relations executive finds her favourite cosmetics and personal care brands such as Garnier, L'Oreal, Maybelline and others on e-tailing or online retailing websites. "There are a number of these online," the Mumbaikar says with a smile. "And at good prices."
D'Silva isn't alone. E-tailing sites, which offer every-day discounts, are an equally happy lot, as a number of international brands have come online, boasting different variants of their products at discounts ranging from five to 70 per cent.
"We started the cosmetics and personal care segment six months ago," says Manu Agarwal, founder and chief executive at naaptol.com, which sells 50 different cosmetics products of Garnier. "They are doing very well. We sell some of the top brands such as MAC, Lancome and Loreal." The entity sees 30 to 35 per cent growth month-on-month in this category.
Similarly, the number of cosmetic brands online on Tradus.in, the e-shopping site of Ibibo group, has doubled in the last three months, according to its managing director Krishna Motukuri. Tradus sells 25 different international brands. "We are seeing good traction for these products, as more brands are coming online," adds Motukuri.
Agrees Arvind Singhal, chairman of business consultancy Technopak: "If you are a regular user of these, there is nothing like the touch and feel. You can easily buy these online instead of wasting time at supermarkets."
According to Technopak, the e-tailing market in India is estimated to be $0.55 billion (or Rs 2,695 crore) and expected to touch $60-$70 billion (Rs 343,000 crore) by 2020.
A new avenue
Experts say e-tailing sites are providing a new avenue, especially for products that do not have adequate reach on the ground. For L'Oreal, to cite an example, this meant taking their make-up range and premium skincare products online.
According to Satyaki Ghosh, director, consumer products division, L'Oreal India, almost 10 per cent of its make-up and premium skincare catalogues across brands have been taken online. The result is that business has simply zoomed. "From a zero base 10 months ago, almost 0.3 per cent of our monthly turnover now comes from these e-tailing sites. We expect this to grow," he says.
"For brands like L'Oreal, the reach of modern retail is limited in India and display in mom and pop stores is poor. So online is a way to reach new customers in new geographies," says Singhal of Technopak.
For most fast-moving consumer goods companies, modern trade comprises just about 8-9 per cent of overall sales. Traditional trade is still the dominant channel of sales.
L'Oreal alone is working with about six to seven e-tailing sites. But inquiries from potential partners simply refuse to die down, Ghosh says.
Channel to liquidate inventory?
While websites deny that the presence of global brands online has anything to do with the economic slowdown, some like Tradus's Motukuri say that increasingly wholesellers/distributors are approaching them to quickly liquidate inventory of previous months.
"Online websites," says Sandeep Komaravelly of Snapdeal.com, "act as a complementary channel to offline sales." The brands want to capture the online audience which is growing bigger, adds Komaravelly who is the head (marketing and alliances) of the company, which launched the cosmetics and personal care categories on the website about six months ago. What about the perception that these discount sites erode the brand value of international brands? Ghosh says there is no erosion of brand value. "If anything, these sites are using our name to lend credibility to their business," he adds. Says Agarwal of naaptol, "Today 80 per cent of products offline are available online. The perception then that discount sites will erode brand value is passé." Singhal adds that discounting is on the price, and not on the brand.
"If you are online, certainly there is a price advantage for shoppers."
According to Ghosh, e-tailing sites will work if their mechanism is right: focus on the back-end, on-time delivery in good condition.
