From UPSC perspective, the following things are important :
Prelims level : Disintermediation
Mains level : Paper 3- Duopoly in e-commerce in India
E-commerce was expected to provide the level playing field. However, Indian e-commerce has been experiencing the duopoly and new entrant faces several difficulties.
What is disintermediation
- The emergence of the internet was seen as a tool for marketers to reach consumers directly.
- The term disintermediation meant taking intermediaries out of the loop.
- The aim was efficiency.
- It was hoped that without local stockists and distributors in between, retail demand could be fulfilled at lower cost.
- After all, anyone could put up a website and woo traffic.
What is the issue?
- Today, the gains of online market addressal have converged into the hands of a few big winners in a winner-takes-all scenario.
- Getting an app onto handsets often involves a toll paid to e-gatekeepers.
- These apps created an entry barrier for the new entrants.
- So far, single-brand apps have mostly failed, regardless of price baits.
- After all, it is hard to beat the convenience of a single-touch window that lets shoppers load e-carts with all their needs.
E-com was once about snipping out distribution networks. With market access cornered by pioneers, now others want to get past these intermediaries. Only blockbuster apps can do it.