For retailers, ecommerce highs come with headaches

Kolkata: Rising consumer complaints, costly market exits and the need to rein in online discounts are emerging as new headaches as retailers struggle to compete with Amazon and Flipkart without undermining their core store business.

Indian retailers are learning the hard way that ecommerce growth comes with a steep price - not just mounting losses on the balance sheet.

Tata-owned retail chain Trent reported a 35% year-on-year jump in consumer complaints to over 300,000 in FY26, which its latest annual report attributed to the growing online business. V-Mart Retail and Titan also reported increases of 14% and 9%, respectively, taking complaints at each company to more than 130,000.


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Vedant Fashions reported a marginal increase, while Shoppers Stop saw a small decline in complaints, including those related to delivery status, refunds and returns.

But the complaint headache may be the easier problem to solve. The bigger challenge is deciding when to pull the plug on markets where chasing online order volumes comes at the cost of profitability.

Leading grocery retailer Avenue Supermarts, for instance, sharply pruned the footprint of its online venture DMart Ready from 24 markets to just 11 top-performing cities last quarter, as it sought a "sustainable, profitable ecommerce model", MD Anshul Asawa said.

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The company exited Chennai, Gurugram, Vijayawada, Raipur, Amritsar, Jaipur, Surat and Nashik. Asawa said its initial expansion into newer markets helped acquire a large customer base but came with a significant increase in losses. Rival Reliance Retail, which is doubling down on quick commerce and digital retail this fiscal despite margin pressure, is also cautious.

"We will go in a quite disciplined manner, just not chase volume growth or some vanity metric on number of orders," Reliance Retail CFO Dinesh Taluja told analysts recently, adding that the company would scale back operations where its "assumptions on the profitability do not hold up".

For retailers, however, the challenge is not only whether to stay in the online game, but how aggressively to play it.

Infiniti Retail, the Tata-owned electronics retailer that operates Croma, has aligned prices across its stores and online channels, barring a few products. Croma once ran aggressive online promotions but changed tack after finding that 70-80% of consumers research prices online before coming to a store to make their purchase.

Indian retailers have invested heavily in ecommerce, but the payoff remains limited. An ET analysis of large publicly traded retailers found that ecommerce's share of total sales has largely stagnated, growing by no more than 1-2 percentage points over the past four to five years.

Yet retailers continue to fund their digital bets. After pruning its online footprint, Avenue Supermarts approved a fresh investment of up to ₹500 crore in its online grocery business, even as net losses surged 24% year-on-year to ₹306 crore.