Growing craze for online stores hits local retailers

  • Saurabh Chauhan, Hindustan Times, Shimla
  • Updated: Oct 12, 2014 20:01 IST

The growing craze for online shopping is weighing heavy upon the businessmen in the Shimla city. The online stores, providing huge concessions to their customers, have adversely affected the sale of the products through retailers.

The local business community in the capital town claims that it has lost much of its profits during the Navratri and Dussehra festival due to online portals selling these products.

There is growing fear amongst the traders that the online stores will eat into their profits during the Diwali, when their sales used to jump.

"People now shop through websites and get good discounts, which we cannot offer. If the trend continues, small retailer will be vanished soon," said Pradeep Chauhan, an electronic store owner.

"I checked a watch in a store at Shimla. It is available here for Rs 10, 900, while the same piece online is available for Rs 7,400. I find online shopping more convenient," said Yashima Chauhan, an online shopper from Shimla.

In the recent years, craze for online shopping has gone up and now online stores have also been offering different types of offers. Few days ago, some leading online stores had offered heavy discount.

It has also affected the sale of books in local market. "Number of customers has increased, but availability of books on online stores has impacted the sale in the retail stores," said Rohit Aggarwal, a book store owner.

Growing clamour for online stores has spelt doom for over 2,000 traders in Shimla market. Trader body has been urging the government to impose tax (value added tax) on online stores. Citing the loss to the government, Shimla Beopar Mandal president Inderjeet Singh said online stores have been giving tough competition for physical retailers, not only here, but across the country.

"Youth is main market for electronics and ready-mades, but these are available on online shops on cheap rates that we cannot afford to offer in our stores," he said.

Claiming the huge revenue loss to the government, he said sale of online store over Rs 6 crore has been registered across the state during last month.

"Tax varies from 5% to 13.75% on products. If we consider 8% average tax then the government could have earned over Rs 48 lakh from online stores," he said, adding that the government should impose tax on online stores.

In Shimla town there are over 2,000 shops, of which majority are of electronic goods and ready-mades. Several brands showroom on the Mall road has also seen decline in their sale.

Lower bazaar-a famous market amongst the middle class population- has also witnessed the decline. Readymade retailer Sanjeev Malhotra said people had been opting for online shopping. "Even my daughter prefers online shopping most of the time and gets heavy discounts," he said.

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