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Response to Special Correspondent of The Hindu’s email query / question dated October 9, 2014

Backdrop incident:

  • Flipkart’s Big Billion sale fiasco hands edge to competitors like Amazon, Snapdeal – http://articles.economictimes.indiatimes.com/2014-10-09/news/54827462_1_snapdeal-and-amazon-flipkart-s-big-billion
  • ‘Big Billion Day’ sale gets Flipkart millions of unhappy customers – See more at: http://indianexpress.com/article/technology/technology-others/bigbillionday-gets-flipkart-millions-of-unhappy-customers/
  • Sorry, say Flipkart founders – http://www.thehindu.com/business/Industry/flipkart-accepts-shoddy-performance-apologises-for-glitches/article6478831.ece

What happened with Flipkart sale demonstrates the dynamic nature of market forces. The fact that retailers/traders and consumers have forcefully spoken stands testament to the dynamism of our market. It was quick, unambiguous and by and large assumed a national profile since this was spread-out across the country.

This being a B2C event has meant that the effect is tangible and felt far and wide by public-at-large. I am interested to see how the wholesalers and members of the manufacturing community articulate their views on this event and see its impact / outlook for future.

For what it’s worth, I think the task for the industry, traders/retailers and government is cut-out. Rising Internet connectivity and adoption is a certainty. This means a consistent and continued incremental acceptability of e-commerce as a medium of exchange. Given this, I am of the view, that the Government must look into how to ensure a fair level of competition and identify appropriate avenues to realize reasonable revenue for Governments. I have all reasons to believe, going by the publicly stated (rather swift) Government response, that this is being done.

It is clear – Customers seem to be impressed with the proposition offered by Flipkart… So much that those who couldn’t successfully participate in the sale were disappointed quite a lot. Collateral impact has been felt directly by consumers, retailers and traders. There is a learning take-away for each of these market player segments.

I would however be optimistic about the medium / long term structure of the market. There may be a few changes that will be forced – among them – there must be a correction in operational costs for traditional retailers/traders. Internet / e-commerce companies must brace themselves for even better service and quality standards and invest in people, technologies, infrastructure and market relationships to meet demand of such a large consumer segment in India. Consumers must be assured of quality, reliability, reasonable costs and great customer service but they may also watch out for their needs profile (and develop a capability to withhold themselves from needless and excessive urges to shop). Behind the screen value-chain (sales & distribution) activities might open up formal and casual employment opportunities. Market development and penetration potential seem evenly poised for both brick-mortar retailers / traders as well as e-commerce companies. Renewed negotiations will be intensified between manufacturing – wholesale distributors – retailers & traders.

There seems a scope for interdependence and interoperability between traditional brick and mortar retailers – traders – ecommerce companies.

Let’s remember that changes & shifts in business and operation models are inevitable, especially when we are witnessing an ongoing phenomenon of rapidly rising internet connectivity and internet technologies adoption.

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