Despite online growth, consumers still prefer to purchase large-ticket products  ..

It’s not just online shopping that boomed during the pandemic, but consumers seem to have also preferred buying products such as smartphones, televisions, refrigerators or even apparel from large retail chains.

In electronic products, the market share of organised retail stores has increased 4-7 percentage points in the last two years, according to latest data from market researcher GfK India. Listed apparel manufacturers Aditya Birla Fashion & Retail and Page Industries said sales from large chains and their exclusive stores have already exceeded pre-pandemic levels, but small stores are yet to catch up.

Despite lockdowns and other restrictions on the movement of people during the pandemic and shopping increasingly shifting online, many consumers still preferred visiting showrooms to purchase large-ticket products, where seeing and feeling is a major factor in decision-making. Many small retailers selling discretionary items, however, suffered a loss of business and had shut shop.

“Organised retail is doing very well,” said Haier India president Satish NS. They advertise promotions frequently and offer similar pricing as the smaller stores with a wider variety and financing schemes, he said. Also, consumers during the pandemic felt more comfortable to shop from a large store, he added.

As per GfK, the contribution of organised retail to smartphone sales rose to 19% in 2021 from 15% in 2019. For televisions, this increased to 44% from 37%, for refrigerators to 35% from 28% and for water filters to 34% from 29%.

This performance has come despite a surge in the market share of ecommerce across all consumer goods — from smartphones to televisions and apparel — and seemingly at the cost of small retailers. In smartphones, for instance, ecommerce contributed 39% to total sales in 2021 compared with 35% before the pandemic in 2019. Its share in televisions rose to 31% from 24%, while for refrigerators, it more than doubled to 16% from 7%, and rose to 20% from 13% for washing machines, as per GfK.

The consumer behaviour is driving retailers to adopt multi-channel retailing a standard business model. “The acceptance of tech advancements by both organised and independent retailers is expected to infuse growth of omni-channel retailing for consumer electronics,” said Nikhil Mathur, managing director – India at GfK.

In apparel, Aditya Birla Fashion & Retail said its retail business expanded more than 30% in the last quarter compared with pre-Covid. But wholesale business that supplies to multi-branded outlets, especially the small ones, had not recovered fully and was still at 95% of the pre-pandemic level. For Page Industries, which sells the Jockey brand of innerwear, the number of multibrand outlets expanded more than 60% in less than two years, but revenue growth was slightly lower than the retail expansion, indicating that the old stores were still operating below the pre-pandemic levels.

In non-metro cities, brands are pinning hopes on smaller stores.

“In a country like India with large populations residing in tier-3 and below towns and low-category penetrations, there is a huge opportunity for independent channels to flourish,” said GfK’s Mathur.

The performance of organised retail in consumer electronics was in stark contrast to that of large chains selling daily necessities and groceries, where consumers bought more from online and kiranas in 2020 and 2021, as per Nielsen data.

Source-https://retail.economictimes.indiatimes.com/news/industry/despite-online-growth-consumers-still-prefer-to-purchase-large-ticket-products-offline/90302596

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