E-commerce is reshaping the retail market in India and globally. Impelled by the lockdown due to COVID-19, several FMCG companies used the e-commerce platforms to launch products. This was even before the products were made available in the traditional retail shops.
The stringent restrictions and slow consumption forced the businesses to halt the production units during the lockdown. But, the e-commerce platform brought a ray of hope for the brands giving a push to their sales.
Companies have also been able to successfully promote their brands through online first or the online-only strategy for the niche or premium brands, which is usually missing in offline retails shops. To the extent that, some reports suggest that companies were able to generate up to 8 percent of sales via e-commerce. More than 100 brands launched their products online first during the last year’s Amazon Prime Day sale.
What Makes Online a Laboratory for New Launches?
Unlike traditional retail, a basic e-commerce store can be up and running in just a few clicks at a much lower cost. An e-commerce channel allows companies to avoid many large, upfront investments that traditional retail can incur, like an inventory, physical storefront, or payroll. An online store lets companies sequentially build their business as the sales grow. At the same time, the use of a mix of online touchpoints to engage multiple audiences at once helps the companies reach out to new customers, serving the niche markets.
A study suggests that the e-commerce industry in India has been growing exponentially and is expected to become the second-largest e-commerce market in the world by 2034, surpassing the US market.
Shoppers commonly resort to online research to compare brands or prices or even check inventories. Brands making a digital presence ensure that the potential customers find their products easily. One added advantage of selling products online is that it allows companies to collect, measure, and analyze customer data. This data helps companies get constant feedback and actionable insights, pushing them to further innovate for a better customer experience.
Benefits of Selling Direct-to-Consumer (D2C) with E-commerce
More than ever, consumers, today start their buying journey by making purchases online. This has given a big boost to the direct-to-consumer selling models. For companies, one major advantage of this model is that brands can reach their customers anytime, anywhere.
Prior to the internet era, brands largely relied on resellers to reach their customers. Websites enable the brands to broaden their market globally. E-commerce helps the companies sustain their market segments as the physical stores are harder to maintain. One very important aspect of the D2C model is the company’s direct engagement with the customer. Shoppers love when the brands directly interact with them and this helps further expand the opportunities for the brands.
The pandemic compelled the consumers to alter their preferences, but now both the companies and consumers like the change. Keeping up with the trend, the companies are gearing up for more launches in the coming future. Major FMCG giants are prepared to launch their products exclusively in the online market. For this many online exclusive innovations are in the pipeline. In the offline format, it takes time for the seasonal products, especially, to expand and reach the target group. However, the online channel squeezes the time for such launches.
In a spirited discussion on AI and the retail industry, Puneet Chandok, President of Microsoft India and South Asia delved deeply into India's role in transforming the world through Artificial Intelligence and technology enablement. He discussed Microsoft's commitment to India, not only in training Indian talent but also in leveraging it.
On Monday, Prime Minister Narendra Modi had praised the Tech Entrepreneurs Association of Mumbai (TEAM) for hosting Mumbai Tech Week and their ongoing involvement in building tech startups in the country. During a panel discussion with Haptik CEO Aakrit Vaish at Mumbai Tech Week, Puneet Chandok, President of Microsoft India and South Asia, emphasized the transformative impact AI could have on various aspects of daily life.
Chandok stated, “When we look at India through the lens of demand, supply, and impact, there is no other market like India today. There are 7,000 listed companies in India and one hundred thousand startups. Many startups are in Maharashtra, and one hundred new startups are emerging in India every day. India is the largest SMB market globally, making it one of the most exciting markets today.”
He further added, “When we look at the supply lens and examine Microsoft's data, one out of four projects on AI in GitHub today is run out of India. Every sixth AI researcher in the world is from India. In the next ten years, 25 percent of the global workforce will come from India, meaning every fourth worker in the world will be from India.”
Discussing the growing influence and power of Artificial Intelligence, Chandok mentioned, “Last night, my 12-year-old daughter was creating text-to-video, and she told me that AI will change her life. She is an artist; she draws and paints. This also indicates how the younger generation perceives AI.”
Expanding on this, Chandok continued, “People will stop searching and instead have conversations. I have stopped searching myself; in fact, I was conversing with my Copilot to understand what is happening at the event and what I should speak about. We have shifted from searching to genuine conversations. This is not just chat drama anymore. These are sophisticated engines providing reasoning within.”
Regarding his personal perspective, Chandok remarked, “People say AI is overhyped, but I think it's not hyped enough. The next generation, which will use this in the next few years, will have much higher expectations of what technology can do for them. So, how you build it for that generation, how you build it for that future, will be really interesting to see."
Chandok also emphasized that those who do not embrace AI, risk falling behind in the rapidly evolving technological landscape. He encouraged Indian developers to seize the "lifetime opportunity" to become unstoppable by learning to use and deploy AI effectively.
He concluded, “If you are not learning AI, you are falling behind. I myself spend 30 minutes a day to learn more about AI. Technology is changing every day, and it has been 15 months since ChatGPT was launched. The speed of technology diffusion is unlike anything I have seen in my life, and it is advancing very rapidly. My call to action for everyone is to find a way to learn, otherwise, we will all fall behind.”
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