So finally the tsunami of e-commerce has arrived in India
difficult to digest for many, that the young company Flipkart is now valued 6 Billion USD
though its way below than Amazon’s 180 BUSD still its a mind blowing achievement for any nascent start up
and it has started flooding with water the day to day businesses already
What will be the effects of this tsunami
undoubtedly they are going to be immense
recently mobile hand sets majors such as Motorola, Xiomi, etc. has taken exclusive online route only via flipkart, snapdeal, to name few
so you cannot buy through any other option like from any shop in the mall, etc.
and they get sold out in matter of minutes
the working capital is therefore negative
and this is now “pull” instead of “push” model if we refer Supply Chain Management
big savings such as: no real estate cost of shops, manpower in those shops, indirect costs, to name few
Govt. is also having profit from this route as there is no escaping of taxes, stream lining of consumers data
but the effects are way beyond all this
1. its going to encourage INNOVATION like never before
there was one HBR report few months back which said the next decade is going to be ruled by innovation
so how e commerce can effect that
think like this, you make a product in a remote town in your factory, before e commerce the customer set was small, may be in vicinity, or till where you have contacts with distributors. But now when you display the same product on e commerce website, it will reach to millions at one go, and if the product is really good, you might not be able to supply the demand which will come thereafter
2. now the delivery through drones is also under process of becoming reality
which will again spur the growth like never before
Amazon is talking of this, coming straight from sci-fi movie thing
imagine you are hungry and you want your pizza. of course you can’t wait for next day delivery.
now imagine you want to buy anything and you know it can come within one hour. it will catalyze the whole shopping experience.
3. its not that difficult to imagine that in future things will get changed entirely
big warehouses in cities meeting huge demands through drones, highly efficient, no fuel wastage, no inventory, etc.
even the buzzing and guzzling malls may also face decline in shopping trends
4. The Big Benefit coming is also on Inventory Holdings
lots of manufacturing units which today sits on huge stacks of inventory of finished goods will be able to deplete their stocks much faster through discounts on e commerce websites
5. The Govt.s opposition to FDI in retail is also of no use anymore
Initially the big fuss was on allowing Wal Mart, Tesco, Metro, Carrefour, entry into India
small retailers were making hue and cry on their survival. The real threat to them was first from Malls and now from E Commerce.
If I call myself A Futurologist, strategies of the corporate world and government’s public policies need to align themselves very soon with this new trend