This had to happen someday. Kishore Biyani’s E-Zone was on an expansion spree with many outlets in Bengaluru. The Rajajinagar one was the biggest of all and the Future Group started gobbling up many more properties to open an e-zone everywhere. But what he did not anticipate is the performance of other small time players with the weapon they had against him – ONLINE SHOPPING!
It is important to understand that when you open an physical store, it is going to cost you money. From the rentals to the employment you need to generate to keep the store going, and the miscellaneous bells and whistles like the parking space the footing of electricity bills and generator fuel and what not. Not to forget to mention the traffic jams generated due to your store, the physical store route is always the least profitable. When it came to electronic gadgets, distributors caught on to the fancy of opening their own stores a-la-ebay.
The small time players dealt everything online and slowly grew big. This included sites like the erstwhile fabmall.com which got taken over by indiaplaza.in, flipkart.com which is waiting on a potential acquisition from a bigger player like Amazon in the USA, and infibeam.com – another suitor. Now we are not even still talking about online retailers like lootspot.com, letsbuy.com, naaptol.com, theitdepot.com and the likes who can collectively kill E-zone’s entire marketing strategy in one flat year sending it into a loss making enterprise.
Kishore Biyani being an intelligent guy has understood this issue well and has decided to offer e-zone on a platter – so that young online shoppers who do not have the time and convenience can pick up the items they need online from the same huge store across the street. What matters then are the logistics of how to overthrow established players like flipkart.com in the longer run. E-zone’s strategy for sales has always been linking non moving products bundled into some ridiculously highly priced ‘offers’ which people with common sense can easily grasp and stay away from this store. Their products except the MRP’d ones, have always been on the costlier side of things. Given that they are entering online and the fact that Amazon is going to set up shop in India, this kind of selling strategy might fool a few people but not all those who have time and energy to search out a best deal among participating sites. Amazon can with one sweep of their hand kill E-zone’s forward thinking moves with their established presence and product lines.
Better late than never is always appreciated but unless E-zone tries to price its products competitively online owing to the fact that the factors mentioned in para number two are not there anymore as a liability, this is going to be turning out into yet another dormant online shopping portal. We have see this happening with other portals before, and E-zone is not special to get itself out of this mess. Only time will then tell whether this venture is a success or not.