November 8, 2016, will be marked as the landmark day in Indian economy. While the repercussions of the unapprised move are still felt across India, the demonetization drive indeed will be hailed as another bold step towards digitizing the country’s economy. The ongoing discussions about building a cashless economy and the encouraging responses gained from various quarters indicate that Indian economy is open to changes and faster in turning the challenges to opportunities compared to similar economies. As mobile wallets, USSD and virtual currencies pick up momentum in individual cash transactions, e-distribution platforms are making revolution in retail systems.
The rewards of e-distribution in India
Pegging a double digit CAGR of 16.7 per cent, Indian retail industry is one of the fastest growing in the world. The rapid technology adoption driven by the growth of mobile Internet and surrounding app ecosystem has transformed the industry over the past decade, making e-commerce one of the biggest opportunities for investors. The massive investment flowing into the sector will drive the e-commerce industry to US$ 120 billion in revenues by 2020 from US$ 30 billion in FY 2016. E-distribution platforms enter this market scene, which is expected to generate a whopping 530 million shoppers by 2025.
E-distribution platforms can help the retail industry go cashless and at the same time more transparent. This new wave of e-tailing empowers manufacturers, distributors, retailers, and customers gather under one technology platform to conduct transactions more efficiently than conventional systems. The app-based distribution system allows retailers to place orders on the app directly with the company, so manufacturers can allocate supplies directly from their facilities.
The benefits of e-distribution are many. With app-based order placing, retailers don’t miss any sales opportunity. They can place the order wherever and whenever they want. Modern systems also feature analytics capabilities and in-built intelligence, which further help streamline the ordering. For example, it can reallocate supplies from one retailer to another in the event of a supply shortage.
Distributors find the app-based e-distribution system more convenient than traditional systems. They can transfer inventory via the mobile app and track the status in real time with a few taps. Further, they can carry out all monetary transactions with retailers with the help of a mobile wallet associated with the application. Details of daily transactions and payments are available at the click of a button. Wallet balances are instantly transferred to retailers. All of these features help save cost and time to market.
E-distribution can also improve efficiency of the distribution process. The on-demand sales platform automatically allocates inventory based on the availability at the distributor or retailer, so there is no fear of dead stock, nor loss of business opportunity. The built-in analytics in the app delivers insights on the day-to- day sales, which can be studied to devise better sales and marketing strategies. With automated inventory updates and tracking, the system ensures transparency at each level.
E-distribution aligns with the government’s vision of a digitally empowered economy. The digital network acts as the hub connecting the different components in the retail value chain, enabling the law enforcement agencies to track the system and identify the nature of transactions. The digital payment method stamps out fraudulent transactions and so ensures overall transparency in the system.
Lastly, mobile-based distribution systems indirectly help other industries thrive in cashless economy. Telecom service providers, for instance, are among the direct beneficiaries of all digital transactions in the country. Mobile Internet is a flourishing business opportunity for telcos in India. By providing a reliable and secure mobile network, service providers can play an active role in building a cashless, digital India, while also monetizing from these opportunities.
Future of e-tailing in India
In business, innovators are clear winners. It’s because the technology competence gives them agility to stay ahead of their competitors. While e-distribution is still in nascent stages in India, the market opportunity is huge. With India emerging as the second largest smartphone market in the world, the potential of mobile-based e-distribution platforms in the country is limitless. It is likely that popular brands across all industry segments in India will soon join the e-distribution network, enabling their partners and retailers conduct on-demand sales across their networks.
Going forward, a large number of manufacturers will leverage e-distribution platforms to sell niche products in Indian market. As Internet power rises, in tandem with the growing spending capacity of Indians, a massive transformation is in cards for the retail sector. The current economic trends and the long-term impact of the demonetization will infuse digital transformation in every sector, and retail will be the forerunner, no doubt. Thus e-distribution platforms can be regarded as a true, revolutionary approach in Indian retail sector.
~Ajay Laddha, Co-Founder, YMS Mobitech Pvt Ltd
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