True. But this will change with time in India. You can see how things might pan out by looking at how things work in the West. For example,
Newegg.com - Computer Parts, PC Components, Laptop Computers, LED LCD TV, Digital Cameras and more! is the place to go for electronics and they almost always have extremely competitive prices and are in general very reliable. Similarly, amazon is It for books, music, DVDs etc.
Nobody can guarantee low prices. But online stores can cut on other overheads and therefore be more competitive. Furthermore, since most reliable merchants also allow their customers to review their purchases and service experience, they have to go that extra mile to satisfy them. The Internet also makes it easy for customers to find out the best price "in town" adding to the competition.
My 2p
NOT TILL NOW - IN INDIA
1) Are you absolutely certain Newegg and Amazon are LOWEST than physical retailers ? Is this your opinion after reading articles or extensive It shopping experience in US and UK ( online and offline)?
2) You involved in buying /selling for /to the trade? I mean worked in Hardware /Electronics/Retail industry? Can you trow light on margin structure? To retailers and online retailers and mass merchants like chroma and ezone? ( I have some Idea that is why..btw I worked for Ingram(world's largest distri) and Onida) For last 2 years I am away from the industry.
3) What is your take on whacky tax structure ,different tax ppractices and procedures like C-form?
I mean take octroi.In mumbai Octroi is applicable in Main Mumbai and not in Navi mumbai and thane.So in the past Prices of laptops in Mulund and Thane ( which are barely 2 kms apart) were different..Again now they are same and I am told all material is "octroi paid" now.I failed to understand now.
There is certain C form issue in west bengal. again some issues in UP and Bihar .If you see many online retailers on ebay are not shipping to these states and prefer loosing lucrative market.
4) The biggest purchasers are still Modern Retailers like Chroma and Ezone and mass retailers like Vijay Sales,Vasanth,Girias etc.Just now Ezone is arrived in online retail in a big way but again they are into offline.
5) Overheads is misleading.Many online traders are new and need to pay rent with newer rates.,and many retailers in mumbai city are there from decades who owes the place. Think of how rates/rent went up in 20-30 years and factor in this component.
6) How you define the word competitive? Post all internet sales many hi end audio retailers have their presence..as reviews are misleading and some things in audio needs to be experienced before it bought,atleast a sustainable section of market thinks so.
7) Yes it is going to change ...but unfortunatly NOW OFFLINE RETAILERS have edge. I found mumbai's lamigton road prices LOWER for Hard Drives ,Pen drives etc ....againsts ebays 15% Discount coupon!
8) Very very few times some online promo comes which is game changing..but it is exception than rule