PriceBaba is a location based search engine provider, helping the real world shoppers to search prices in their vicinity. It has raised an undisclosed amount of seed investment from five investors, led by Pune based angel investor and entrepreneur Karamveer Singh.

Retail in India is diverse and comes in many flavors. Over the last 11 years I have seen a huge variety of retail in India. Be it the unorganized areas of Crawford Market in Mumbai where you can not walk on the street without being pitched to buy something from a road side vendor, Chandni Chowk of Delhi where you would struggle to find place to walk, let alone driving through smoothly and of course the well built and populous malls across the country.


There is a healthy unorganized and local side to retail in India, good presence of International brands and a developing culture of shopping malls. The difference of course is that, unlike the west, organized retail in India is developing in an age when consumer Internet is already mainstream. That possesses unique challenges - a) Online commerce has an equal play in building its market share, and b) Brand building and customer loyalty for physical stores won't develop without distraction from good online stores.


So let's take a look at the hottest topic for retail in India: e-Commerce. Last decade when the likes of Baazee.com started to gain traction, we thought the age of online shopping is here. 10 years later, we are still talking about a promising future for online shopping. In India, there are plenty of levers to online shopping that makes it tricky for the entire industry. Unlike the ticketing industry where the purchase is electronic and consumption is offline, typical online retail requires inventory & warehousing, logistics, after-sales service and for a consumer the ambiguity of buying something without the touch and feel of real shops. Payments is another issue that has been largely tackled by Cash on Delivery, but we also know with online ticketing that given enough value, consumers in India will find a way to pay for it.


There is real opportunity for online retail in India and at the same time there are very real challenges too. The industry is growing, but with all the hoopla about online retail we should not forget that even in the next 10 years, it would only do a very small fraction of the over $700 billion retail industry.


So where do these local/unorganized, organized and online players stack up when it comes to retail in India? The answer isn't very clear, but we are left with trends, reports and some calculated guesses.


Local retailers are ready to work on low margins and manufacturers are keen on avoiding disparity in online versus offline pricing. Most retail in India happens on a MSRP (Manufacturer Suggested Retail Price), thus heavy discounting or offers by retailers isn't easy. This brings a certain level playing field for retailers across different medium. It is currently hard for any single large retailer to deploy their economies of scale to get into price wars.


Reports have suggested that by 2015, around 20 percent of retail in India would be by organized players. However, it is saddening that large retailers in India fail to setup a strong online presence given that they are coming up with such strong foundations of consumer Internet in India. This inherently puts large retailers with investments in consumer facing infrastructure at risk of being troubled by online players. That's what happens in the west. A consumer walks into a physical store, chooses a product to buy and orders it online using their mobile. However retailers in India have a cushion and time to adapt. Smartphone penetration and culture of transacting online for products is fairly nascent in India. Not only does it require a behavioral change, but also significant infrastructure updates to serve over a billion consumers spread across a large geography.


Any significant breakthrough in organized retail beyond developed towns would be a challenge and would be a slow process. At the same time, there is more than enough competition for acquiring the existing consumer base. We have large retailers trying to master the e-Commerce game; e-Commerce players getting into logistics & payments and payment gateways getting into the e-commerce business. It is a battle to get the attention of those few million Indians who would buy a product online every month.


India is not alien to the growth of internet. e-Commerce would happen in a big way sometime but offline will always stay as well. There is plenty of innovation yet to come in our real world shopping, online shopping and impact of mobile on shopping. Given the political climate, historically slow growth in infrastructure and the fact that majority of the population is still below the poverty line, we can be sure that nothing would dramatically change in retail as we know by the end of this decade. It is a painfully slow evolution, one that would require heavy long term investment and determination to make an impact.