‘VALUE AND NOT DISCOUNTS WILL RETAIN BUYERS'

A combination of convenience, choice and customer-centricity will make ecommerce a mass market business in India

- Deep Kalra

The Prime Minister in his address to Parliament laid out an ambitious plan to make India a $5 trillion economy by 2024. Articulating his confidence in India’s potential, he mentioned that while this was a difficult target, it was an achievable one. If India is to achieve this, technology and digitisation will play a key role. After all, two of the world’s largest economies have grown over the last 15 years on the back of the digital and tech industry. Digitisation and technology are going to play a key role in the growth of existing and new sectors. Affordable access to the internet has allowed the Indian consumer base to become well-connected with the marketplace irrespective of their location, while creating substantial opportunities for technology-based businesses that have significant economic potential.

While the model may look simple, online marketplaces remain extremely difficult to build. Entrepreneurs struggle with a chicken-and-egg problem: To attain a critical mass of buyers, you need a critical mass of suppliers— but to attract suppliers, you need a lot of buyers.

This challenge has indeed botched up many a marketplace. But once the marketplace reaches a critical inflection point, network effects kick in and growth follows an exponential, rather than linear, trajectory.

As more and more internet businesses in India start taking root, discounts that served as an important way to induce trial and lure consumers to move from offline to online will give way to more sustainable ways of achieving growth. We shouldn’t forget that the current ‘App Economy’ has been in existence for just 10 years, and has, in fact, touched India much later.