#3. Online Marketplace Vs Retail Distrbution

Tata Digital forays into online retail and marketplace. The proposed Superapp will encompass a wide array of products ranging from grocery, merchandise, household goods, loans and financial services. Online marketplace model will sound death knell to brick and mortal (B&M) retail / wholesale distribution.

👍 For the motion:

  1. COVID-19 changed our usual way of doing business and hastened up the urgency of having an e-commerce enabled website. Footfalls which used to be 90-95% of the B&M business model embraced selling online because it isn’t just a temporary fix during an unprecedented global event, but a long-term strategy that is enabling the brand to reach a much wider audience.
  2. E-commerce meets the customers where they are. As the digital footprint leapfrogs, reduced human touchpoint providing convenience and cost of delivery including transport costs sweetens the deal.
  3. Marketplace model seeks to replace the middlemen and passes the pricing benefit to the enduser.

👎 Against the motion:

  1. The economic consequences of the COVID-19 pandemic had an eerie echo in the novelchallenges never before experienced as large sections of the country shut down to prevent the spread of a disease. B&M retail is demonstrating a surprising degree of resistance to this threat from a familiar foe (e-commerce). Sales through B&M stores are likely to rebound later this year and next, as the spread of vaccines makes it safe to spend more time in shops and malls again. An informal survey of social media posts shows that, in addition to visits with family and friends or holiday get-aways, the chance to go shopping in person is high on many peoples’ wish lists.
  2. E-commerce sales may not classify correctly everything that is bought and delivered through online channels. Many retailers have adopted hybrid models of selling online as well as through physical stores, for instance Raymonds Ltd. Online marketplaces are also buying huge warehouses as fulfilment centres. Passing on the cost benefit to the endusers might be stunted in the long run.
  3. B&M has always got the advantage of being locally available with no delivery lag. Touch , feel and test factor is grossly missing while buying online. 

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