e-Commerce: The New Boom

Disintermediation from E-commerce

Note4Students

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.

Conclusion

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.

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