Dubai: Jumbo Electronics chief, Vishesh Bhatia, quashed rumours that the group is shutting down its operations in India due to fast mushrooming online stores such as eBay, Amazon, Snapdeal and Flipkart.
In India, Jumbo has 19 stores and one franchise store in Gurgaon.
“We have seen an impact, but how much of an impact is not shown. We are taking a hit, but not as bad as other retailers in India. Tell me one of the online guys who are making profit. Delivery of goods is not easy in India and online sales are not as easy as in the UAE. We are looking at many other alternatives and constantly evaluating things,” Bhatia said.
Indian e-commerce market is expected to expand to $16 billion (Dh58 billion) by 2016 as giants such as Chinese Alibaba and Japanese companies are expected to enter the market. The e-commerce is expected to touch $100 billion by 2020, making it the fastest-growing online market in the world.
Internet user numbers in India rose from 50 million in 2007 to 300 million in 2014.
Morgan Stanley expects the size of the internet market in India to rise to $137 billion by 2020 from $11 billion in 2013 and the market capitalisation of internet businesses could touch between $160 billion and $200 billion, up from the current $4 billion.
Bhatia said that one way is to franchise or open more stores. “We have options to open three more stores in India [one in the West and two in the North],” he said, adding that the franchise store is “promising”.
Asked why Jumbo is franchising, he said it’s due to the strong Jumbo name and low investment. “We get scale, volume and more branded products,” he said.