Tuesday, Oct 04, 2011
Gulf News
Dubai The Eros Group, distributor of Samsung and Hitachi and operator of a sizable retail network itself, is giving serious thought to launching an online store of its own.
But the proposed online presence will not be at the expense of any of the existing brick-and-mortar locations.
“While the e-commerce industry [here] is still in a nascent stage, we are closely evaluating options and will look at the viability of introducing an online store in 2012,” said Deepak Babani, CEO of Eros Group.
“Online will only complement our physical stores and cannot replace or substitute them.
“Online purchases have been a buzzword mainly in the leisure and travel industry. In consumer electronics, however, people still prefer to touch and feel the product and this has resulted in the slow growth of the online retail network.”
That the Eros Group is considering having a parallel channel is significant in itself. So far, online shopping portals in the local and Gulf Cooperation Council markets have been dominated by those who offer multiple product categories and not single lines such as technology and electronics hardware.
That’s why the marketplace looks favourably on the emergence of vertical portals, and particularly from those with the distribution reach and muscle to support a fledgling online presence.
With a logistics network already in place, they have no need to commit the sizable investments that start-ups would have to do to get their online versions up and going. So goes the conventional wisdom. But even with all these favourable head winds, the Eros Group is not about to rush into the new initiative. A primary factor could be that the spurt in online shopping portals has not had a major impact on margins for the physical store operators here.
“Just as in any business, each industry has to evaluate the pros and cons of the online purchase model and not look at replicating it by seeing the success of the same in another industry,” said Babani explaining the reason for preferring a cautious approach.
“While online purchases have worked wonders for the aviation and hospitality business, for consumer electronics in this region it has still not received strong customer support.
“This trend, however, will evolve and we will select the right time and method appropriate for the region and its sensibilities to tap the opportunity.”
Adding more brands
While it mulls the viability of an online presence, there are other things keeping the group busy. Of late it has been adding global brands that have been untested in the region to its distribution and retail channels.
“Building these brands in this region will take some time and we are quite buoyant of their growth [possibilities] in the coming period,” Babani said.
“In the UAE, the distributor has always been an important part of the value chain. They will always play an important role as long as they work in tandem with the principal’s objectives and values.”
By Manoj Nair?Associate Editor
Gulf News 2011. All rights reserved.
