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New Delhi: With the Covid-19 pandemic continuing its relentless march, the time has come to re-assess India’s position as the poster-child of emerging markets. Our GDP has been contracting at a terrifying pace, and most credible analysts foresee negative growth figures in the current financial year.

In this time of economic crisis, many are looking toward India’s vibrant startup ecosystem to drive growth. However, the ecosystem has been plagued with some unique challenges and needs stakeholders to really come together in a spirit of cooperation to pull the country out of this rut. A key stakeholder in this context will be the e-commerce companies, which can help Indian startups with their most pressing challenge, which is scale.

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In my experience as an entrepreneur and investor, I have found that the biggest problem is the information gap that exists between those who create products and solutions and those who are supposed to use them. Bridging this gap and developing an in-depth understanding of the customers and their needs becomes a tough one for many young founders as they seek to grow beyond regional pockets.

E-commerce helps startups with innovation & investments

India is a diverse country with many cultures, languages, ethnicity and religions co-existing within a common market. Many founders with great technical skills struggle to understand preferences and communicate with consumers at a pan-India level.

I think this is where e-commerce can play a fantastic role. Most platforms are now available in regional languages, allowing sellers to easily roll out their products nationally. The regional language option on portals such as Amazon and Flipkart give consumers in smaller towns and villages a personalised experience.

In turn, startups are also able to take advantage of the burgeoning demand for products through the online channel in these markets.

Another major challenge for startups when they are trying to scale is the inefficiency of industrial transportation networks in India. In the modern day, to truly satisfy customers, startups need to constantly improve their customer acquisition methods and ensure their back office supply chain and logistics are cutting edge in terms of technology and processes.

Advanced technologies such as augmented reality, drones and robots that can help pack and ship products are key to reducing costs and ensuring the competitiveness for startups. Startups can now take advantage of these innovations without investing in them directly by partnering with e-commerce platforms.

Furthermore, the e-commerce sector also helps startups focus on their core value proposition and product development by taking away the need for them to invest time and resources in warehouses and distribution centres as they acquire and deliver to consumers across the country.

E-commerce platforms have immense positive multiplier effects

Online selling also helps startups manage and analyse their business data. This allows them to figure out what works and what doesn’t work across various markets and adapt accordingly. Availability of data takes the guesswork out of marketing decisions taken by startups as they explore and enter new markets within India.

With the ability to reach customers across the length and breadth of the country, startups can test products and collect consumer feedback more easily and arrive at the insights that then set them up for success. By helping startups discover the ever-evolving needs of consumers and helping them identify the best customer segments, the e-commerce sector can usher in the next wave of startup success stories in India.

In light of the above, it is extremely important for the startups as well as other stakeholders, such as consumers and policy-makers to take note of the immense positive multiplier effects that can be created by e-commerce platforms.

With the right kind of support, the advantages brought in by e-commerce platforms like Amazon and Flipkart will allow online sellers of goods to not only scale up within India, but also to overseas markets. Having an online presence gives startups a clear view to global markets.

Unfortunately, the e-commerce sector has been at the receiving end of a regulatory onslaught. Anti-trust, taxation and ‘country of origin’-related issues have hampered the ability of platforms like Amazon and Flipkart to focus on their value offerings.

At a time when the country needs all hands on deck to ensure economic revival, continuing to treat the e-commerce sector with skepticism will be akin to cutting off the strongest helping hand for the economy.

The author is Director of Zed-Axis Technologies, a New Delhi-based software development company. He is also an investor in early to mid-stage deep technology companies working in consumer, healthcare, finance, logistics and entertainment sectors. Previously, he has led the India growth-story for multinationals like Samsung, Zayani, MMore and Indian transnationals like Moser Baer. He specialises in strategy and sales. 

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