The Volcanic Effects of E-commerce, a disruptive innovation and its impact on the Future

Rise of the E-commerce of-course is a disruptive innovation with far reaching impacts on the future.

The rise of Amazon (Globally), Alibaba (China), Flipkart (India), Snapdeal (India), Jabong (India), Indiamart (India) is phenomenal. 

What are we looking at then in coming years.

E-commerce will impact a range of regular life common things.

1. Now Factory is next to the door of the end user. All the middle men role is getting eliminated. Result e-commerce is already able to pass on 30-50% savings to the customers. Which is huge. Perhaps long lying idle items in the remote inventories are being offered even at discounts of 80%. The beauty is that a person can simply buy a product of its use which was lying unused in a shop 1000 km away. That is the power of e-commerce.

2. E-commerce will encourage innovation on a whopping scale. For example, we have seen how hotel booking websites are reaping benefit of this technology. Rooms lying in inventory in non busy area hotels (not on the main streets) are now on offer for cheap, and consumer is happy to lodge there in order to save big bucks. Hence, an hotel with innovative customer pleasing abilities other than savings also now have huge chance to make money which earlier was not possible. Lets take another example, a painter now stands chance to showcase his paintings to the global audience rather than to few hundred that too at a costly rented hall.

3. Death of show rooms and shops:

I see this as the biggest impact of e-commerce.

It looks to me that now it is almost impossible to run a show room say of electronic goods or mobile handsets in the era of e-commerce. The inroads is not only limited to the high end items. Now e-commerce companies are delivering children napkins, day to day toiletries items,any thing you say.

Obviously slowly slowly running a shop can no longer be a profitable and feasible option.

My worry is what these people will do in near future.  A mass level un-employment can get generated out of this lieu. In country like India, a big chunk of population is engaged in this day to day small scale shop businesses. India has yet not matured to the kind of economies which is in USA or other OECD countries. So what these people will do.

If one recall, there was good degree of protest and Govt. of India finally never allowed global big retailers like Walmart, Carrefour, etc. to enter into India despite these companies great lobbying efforts. However now this is passe. I think in e-commerce era, the impact has been already way higher than anything else.

Its both positive and negative. On one hand it is removing inefficiencies while on the other hand a big number of people (in millions) will have to consider earning options in a new manner.

4. Death of Malls: in last 10 years in India, Malls witnessed a splurging business environment. But no longer external factors look in their favor in the era of e-commerce and big LED TVs.

The generation Y is fond of watching movies in halls. However with affordable 50 inches 4K TVs coming down the line and HD Dish Services, movie watching patterns will change for sure.

Similarly people going to Malls for shopping will no longer be motivated that much. With the kind of discounts on offer on any e-commerce website, traditional shopping at malls will see a huge decline.

Remedial Measures:

1. I’d suggest that it is no longer going to be profitable to be in shop business of any product which is on offer on any e-commerce website.

It is now a Red Ocean scenario.

Probably one might need to prepare him self for employment in corporate sectors, or free lancer career profiles, entrepreneurship, or something similar. It will still take time to understand where this chunk of population will migrate for regular earnings.

2. Malls: for recreation purpose they will continue to attract people. However now change require in terms of services on offer at Malls. It can be, in-house ice skating, games, coffee shops, etc. which can continue thriving.

Future:

Future will be very different from now. In next 10 years these transformation will keep happening. However if we talk about after 20 years, in my view, we will see ubiquitous drones, tall Eco-friendly skyscrapers, thrust on solar energy, sharp drop in fossil fuel usage, smart cities, seamless data connectivity, driver less cars, etc. can be part of normal life. Its incredible and exciting.

My Thoughts Only!

God Bless!

www.rishabhagarwal.in

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s