Do consumers love ecommerce platforms or do they approach them with suspicion? Is there a need to protect consumers from ecommerce players? The editorial of this paper [28 January 2025] pointed out to the draft guidelines put out by Bureau of Indian Standards. Is there a need to further regulate the ecommerce players?
Ecommerce has been a blessing and a curse. It is well known that the book shop business, both in India and around the world has not recovered after the onslaught of Amazon. Prophetically the owners of the much loved book store Landmark sold their business to the Tatas just a year of so before Flipkart was launched. But ecommerce has also been a blessing for numerous small businesses who can now access consumers pan India. At a seminar organized by the Ayurvedic Product Producers of India, Amazon made a presentation on how they are helping many of them take their products across the world.
There is a problem that some small brand owners are worried about. Since platforms like Amazon, Flipkart etc. own the customer data, what if they launch their own copycat products as a ‘basic’ line? To protect small businesses there is regulation that a platform cannot be a merchant. Unfortunately there are ways to work around this issue. But by and large companies, big and small, are satisfied with this rule and are not feeling overly threatened. The new issue they are facing is that platforms are becoming advertising media as well, competing with Google/Youtube and Meta. So if you don’t have enough brand pull then you will be arm twisted or cajoled or nudged to spend more on promoting your brand on the platform. The new variation of ecommerce, Qcommerce too is following the same patterns of ecommerce. Overall feeling among marketers is that ecommerce and qcommerce are reducing the friction in the last mile and will definitely stimulate consumption.
Coming to consumers, what do they think about ecommerce? Are they worried that ecommerce platforms are tracking their movements on the web? Are they aware that ecommerce platforms may be modifying the prices offered depending on the smartphone they use?
We talk of global information deluge and how we are drowning in information. What about the lay consumer? Are they hassled with this information tsunami? Global research has shown that consumers are actually quite happy with the additional information that is flowing towards them. Yes, when it comes to purchase consumers do get troubled if you throw too many options at them[Paradox of Choice Theory]. But they seem to like the fact that they can check out reviews of just about anything and any service. They are also becoming adept at using comparison websites.
Ecommerce platforms have cottoned on to the voracious appetite of consumers for information. Platforms like Nykaa and Myntra today offer products and an unlimited amount of content for consumers to devour. Offering additional content is helping them build a better connect with their consumers. Improving the stickiness of their platforms.
Then we have the potential problem of ecommerce platforms manipulating prices depending on the smartphone or time of day or location. This is a problem that is difficult to monitor and police. Even your neighbourhood fruit vendor will adjust his prices depending on the car you are seen driving, or the time of day. I was given a taste of this a few days ago at the Dadar market; the corn vendor gave me an extra ear of corn just because I was probably the last customer for the day. So has the corn vendor been cheating all his other customers. Most definitely not.
Indian consumers are smart. They are able to do Webrooming and Showrooming with equal skill [check out Business Standard 2 March 2023 for my article on this topic]. They navigate across general trade, modern trade, ecommerce and now qcommerce. As the MD of one of India’s most successful lifestyle companies told me a few years ago, the consumer who buys watches in a watch retailer is different from the one who buys a watch in a department store, who is different from the buyer at the company store, who is different from the one buying it online. Chances are while you have your preferred destination to buy, you may be visiting multiple touch points before moving to the last stage.
It is good that ecommerce platforms are being told to self regulate and not indulge in either price gouging or price baiting. It is also good that authorities are laying down guidelines for platforms to adhere to with respect to how search results are displayed and limits of the consumer information that can be shared with the merchants. I am sure that Indian consumers are getting smarter by the day and will be able navigate these and other changes that will be thrown at them.
Appeared originally in Business Standard Feb 2025