The clash of the Titans: Alibaba, Tencent & Baidu

Chinese government policies – protectionist or otherwise – have ended up creating behemoths like the South Korean chaebols. While Alibaba is the e-commerce giant in China with an 80% share, Baidu is the numero uno of Chinese search with about 60% share & Tencent - the largest internet services company in China - owns Wechat, the undisputed king of messaging.

Interestingly Alibaba’s e-commerce dominance is challenged by Tencent & Baidu to protect their own turf while Alibaba has started to challenge the might of the latter two in their areas of dominance. Each of the players is trying to cut into the other's core business either through acquisitions or sometimes through strange tie ups - of the kind listed earlier. Surprisingly, there was little overlap between the players earlier till China became the largest smartphone market & consumers started using those devices for almost everything: shopping, food ordering & booking restaurants, group purchases, taxi hailing, booking tickers for flights, hotels, cinema etc.  The clash of the Titans was therefore inevitable & is now just unfolding.

Tencent has also bought a 15% stake in JD.com - China’s second-largest e-commerce company - to tighten the screws on Alibaba. It has launched ventures to integrate e-commerce and online finance services with WeChat. Simultaneously it has taken a stake in the 2nd largest Chinese search engine Sohu's Sogou too to take on Baidu, It is an interesting battle where Tencent joins hands with Baidu to challenge Alibaba while simultaneously taking on Baidu on search.

Alibaba is not sitting quiet either; it has picked up a stake in Sina Weibo - a twitter equivalent - to take on Tencent's WeChat. Will Alibaba take a stake in Qihoo 360 technologies - that is currently independent - & which runs the 3rd largest search engine in China & provides security software or push its own search engine Shenma? Only time will tell.

O2O (Online – to- offline)

Online-to-offline is the biggest cake in e-commerce; creating a rebound between offline & online by leveraging tech enablers is the way forward.

Dalian Wanda group is China’s biggest commercial land developer. Wanda, Baidu and Tencent have created a joint venture in the ratio 70:15:15 with the aim to take on Alibaba. The new group melds Baidu’s search capabilities and Tencent’s popular WeChat social messaging network with Wanda’s brick-and-mortar infrastructure & will develop services, including online finance that could pose a challenge to Alibaba’s popular banking service, Yu’ebao. Wanda said it estimates its shopping malls and other outlets will attract 5 billion customers a year by 2020, making the company the “world’s largest offline commerce platform.” Wanda hopes that users of Tencent’s QQ instant messaging service & social mobile platform WeChat will become customers at its shopping malls, movie theatres and hotels through this new e-commerce platform. Wanda thus is trying to protect its offline business.

Complementary technologies

The fight for content is getting competitive & uglier with each passing day. Control over delivery vehicles as well as gaming platforms is also getting hastened.

Baidu fired the first salvo by buying Internet video business PPStream Inc. in June 2013 for $370 million and combining it with IQiyi.com, which it acquired in 2012. It intends to buy distribution rights for about 1000 Holywood movie titles,produce 7 local films, buy TV shows, co-produce content & create Chinese adaptations of US content.

Ma responded, in 2014, by buying a stake in Youku Tudou, a Chinese equivalent of Youtube. He also bought a controlling 60% stake in ChinaVision Media Group Ltd for $804 million, giving it access to TV and movie content & diluting Tencent’s stake from 8% to 3%. He has succeeded to hit two birds with oen stone. Along with Ali TV operating system launched in 2013 & mobile gaming platform in 2014, In 2013, Alibaba released a smart TV operating system with Wasu – an internet TV company in which Alibaba acquired a 20% stake for $1.05billion - and a set-top box while in January 2014 it started a platform hosting mobile games to compete with Tencent. Clearly Alibaba is strengthening its content & delivery platforms to take on both rivals Baidu & Tencent.

Mobile

In 2014 Alibaba acquired UCWeb - a web browser & search company – which it combined with UC Mobile - one of its business units – to oversee its browser, mobile search, location-based services, mobile gaming, app store and mobile reader operations. Baidu, reportedly tried to buy UC web in June 2012. The deal with UCWeb – with more than 500 million users globally - is valued at more than double the $1.9 billion that search engine Baidu Inc. paid last year for app store operator 91 Wireless Websoft Ltd. Surely the titans are helping in skyrocketing valuations.

UCWeb has a 50% market share amongst web browsers in China & holds a 35% market share in India. Though Alibaba currently has a dominant market share in mobile e-commerce, analysts believe that smartphone users may gravitate to its rival Tencent - which runs the massively popular WeChat mobile messaging and social-networking application. Alibaba’s moves are to checkmate such a transition. UCWeb will also be able to develop browsers and other tech it needs for its smart TV ecosystem and e-commerce businesses.

Car Apps

E-commerce firms view logistics as the next strategic lever to gain dominance & therefore are buying stakes in taxi apps; delivery through taxis, perhaps, is the way forward. This is another way of monetizing its “mapping” assets.

Hangzhou Kuaidi Technology Co., a taxi-booking service is backed by Alibaba, while Didi Taxi, is backed by Tencent. Alibaba also has a stake in Lyft; Baidu therefore has invested in the San Francisco based Uber & will connect its map and mobile-search features with Uber’s service.

Current Strategic Matrix

The current status of the category presence of each of the titans - either on their own or through a strategic stake buy- is listed below. The listings in “green” indicate the market leader in the US & China. The blank spaces are indicative of potential areas of conflicts; acquisitions or strategic buys would be a logical corollary.

Category	Google	Baidu	Alibaba	Tencent	Market Leader US/China
Search	Google Search	Baidu Search	Aliyun Search	SOSO/Sogou	Google/Baidu
Mobile O/S	Android	Android	Aliyun O/S		Android/
Web Browser	Chrome	Baidu Browser	UCweb	TT (Tencent Traveller)	Chrome/UCweb
Maps	Google Maps	Baidu Ditu	Autonavi		Google/Baidu Ditu
Video	Youtube	Baidu Video/iQiyi	Youku Tudou		Youtube/ Youku Tudou
E-Mail	Gmail				Gmail/
Cloud Storage	Google Drive	Baidu Wangpan	Aliyun Cloud/Kanbox	Tencent Weiyun	Google/Aliyun
Social Network	Google +	Baidu space		Qzone	facebook/
Microblogging			Sina Weibo	Tencent Weibo	Twitter/Sina
Shopping	Google Shopping	Baidu Shopping	Taobao/Alibaba/Tmall	Paipai/ Stake in JD.com	amazon/Taobao
Music	Google Play	Baidu Music	Xiami		Pandora/Xiami
Augmented Reality	Google Glass	Baidu Eye			WIP
Payment	Google Wallet		Alipay	TenPay / Weixin / Payment	Paypal/Alipay
Gaming	Google Play	Baidu Games/91 wireless		QQ game platform
Messenger service	Google Talk			QQ / Weixin / WeChat	/WeChat

E-commerce: What is Jack Ma Thinking?

“Mere Paas Ma hai”                          Sashi Kapoor in the iconic film “Deewar”

Well, Vijay Sekhar Sharma of Paytm could say just that, after Jack Ma, the head of China’s e-commerce giant Alibaba, has taken a 25% stake in the firm. There were speculations that Alibaba would buy into Snapdeal - since Alibaba’s marketplace model is close to Snapdeal. Softbank - an early investor in Alibaba - has already invested in Snapdeal. Ma surprised the market with an investment in Paytm, perhaps, to chart an independent path. Just what goes on in the “mind of the strategist”, Ma, a former school teacher who presided over Alibaba’s $25billion dollar IPO in 2014 - larger than e-bay & Amazon combined - can be understood by connecting the dots across the acquisitions & investments made during the last few years.

Alibaba maintains various differentiated marketplaces: Alibaba, a B2B platform, started in 1999 that connects Chinese exporters to companies globally; Taobao, a C2C platform - an e-Bay equivalent - started in 2003, for individuals & small merchants; & Tmall a B2C platform - an amazon equivalent - started in 2010, that connects bigger merchants like Nike to sell directly to customers. It is a dominant player in the Chinese e-Com market with an 80% share; over $250 billion worth of merchandise moved on its platform, in 2013, generating $8.5 billion in revenue with a 44% margin. It also owns, Alipay - with 300 million users - a payment app that rivals Paypal

Jack Ma has made over 100 investments & acquisitions - buying stakes in companies domestically & overseas – with a method to the madness. The starting point of the investment philosophy - gleaned from the prospectus submitted for the IPO – states thus “We have made, and intend to continue to make, strategic investments and acquisitions to expand our user base and add complementary products and technologies. For example, we expect to continue to make strategic investments and acquisitions relating to mobile, O2O services, digital media and category expansion as well as logistics services. Our strategic investments and acquisitions may affect our future financial results.”

Let us analyse each of those phrases.

Investments to expand user base:

With domestic dominance, Alibaba needs to expand abroad. While entry into India & US – the largest e-com market in the world - has been outlined above, Ma has expanded into south East Asia. A localized version of Taobao – which is otherwise in Mandarin - has been launched to facilitate a better consumer experience. Since only 10% of Alibaba's sale, in China, comes from rural, the company is planning a massive rural penetration drive by establishing about 1000 county centers & 1,00,000 village level service centers. Expect, therefore, more geographic expansion internationally & rural penetration domestically as a key strategy to expand user base.

Complementary technologies:

Ma is planning dominance across platforms: search; messaging; gaming; & social media.

Alibaba, launched eTao, a shopping search engine in 2010 & invested in Quixey – a search engine for apps - in 2013. Ma has also invested in Autonavi – a digital maps company, Youku Tadou – a youTube equivalent - & Sina Weibo – the largest social media company in China. He launched Shenma – a web search service – & Laiwang – a messaging app & since the latter was only partially successful, invested in Tango with 200 million registered users spread across the North America, Middle East, Taiwan & Singapore. With Buy buttons on messaging apps becoming popular expect Tango to lead the e-com marketing drives in the geographies listed. Clearly the investments in search is with an intention to checkmate Baidu & Google & the investments on social media is to checkmate Tencent that owns the popular messaging app, Wechat. Not stopping at that, Ma intends to dominate gaming too.

Alibaba invested in a social mobile gaming platform – Ktplay - &  invested in Kabam  It also agreed to take the cloud-gaming service Ubitus Rovio’s Angry Birds Stella into China. According to market researcher Niko Partners, it is designing a high-end gaming console to compete with Microsoft’s Xbox One and Sony’s PlayStation 4 in China. Ma, therefore, is strengthening both the software & hardware offerings in a bid to transform into a gaming powerhouse.

Complementary products

Ma invested in Fanatics- a Florida based exclusive online retailer of sports team apparel to address the needs of consumers obsessed with sports leagues especially the NBA. He has also invested in istdibs – an art & antiques firm that   connects dealers, designers and galleries to help sell fine art, jewellery, antiques, and other high-end lifestyle goods. Incidentally, Chinese buyers account for 24% of the worldwide art & antiques market. Alibaba investment in Yinman - a high-end online clothing retailer that sells its own branded apparel - is perhaps another attempt to further consolidate its hold on the hi end customers & thereby get higher margins.

Alibaba plans to revolutionize the language market too. It has invested in Tutorgroup which offers language learning courses: TutorABC for English language learning students & TutorMing for Chinese language learners internationally.This supplements Alibaba’s own education platform xue.taobao.com.

Mobile

UCWeb – acquired by Alibaba in 2014 - is one of the biggest web browser companies in China, with more than 50% market share. It also surpassed Opera as the top mobile browser in India last year and now holds a 35% market share according to StatCounter, compared to Opera’s 25%. The move is significant because it builds up Alibaba’s mobile strategy, making it a more formidable competitor to other Chinese companies like Baidu, This shall also help penetrate markets like India.

O2O services

In a bid to integrate online & offline- a brick & click strategy - Alibaba acquired a stake in Intime retail to form a joint venture that shall run shopping malls, department stores and supermarkets. Alibaba’s Tmall.com will have access to Intime’s inventory, broadening the variety of merchandise available, and customers can pick up online orders in Intime stores. This perhaps gels in with Ma’s intention expressed in 2013 to create a delivery network to reach any place in China within 24 hours.

With Intime, Alibaba is targeting high-end consumers, who are often trendy urbanites on the leading edge of smartphone usage. Alibaba aims to get those shoppers accustomed to using its mobile payment app, Alipay Wallet, to pay for goods. Going forward Ma could tie up with telcos to offer location based services the fulfilment of which shall be at physical retail that he has currently acquired.

Digital Media Strategy

Ma is busy creating a media behemoth that encompasses print, TV & digital assets along with the necessary content.

Ma in 2014, has bought a stake in Youku Tudou, & a controlling 60% stake in ChinaVision Media Group Ltd, giving it access to TV and movie content – to retain current users and attracting more. The Hong Kong-based company, China Vision, co-manages the Beijing Times, the biggest morning newspaper in the Chinese capital, and has mainland mobile TV broadcast rights to English Premier League soccer for the next three seasons. Alibaba could add certain entertainment and media content into its instant messaging app, Laiwang - which is currently floundering - to increase the popularity of the app.

This comes close on the heels of its launch of its Ali TV operating system last July & launch of a mobile gaming platform this year to compete with Tencent.

Alibaba acquired Xiami - a major music-streaming service - & by April 2013, began rolling out a functionality by adding a “My Music” tab to users’ of “My Taobao” pages. This allowed Taobao users to play music while they shop online, perhaps with an intention to ensure greater consumers stickiness to the site & propel impulse purchases.

Logistics

Logistics is a key vector in the success for any e-com venture.  Ma, therefore, has acquired a 10% stake, in Singapore post to strengthen the regional logistics value chain in SE Asia. He already has a 39% stake in a US based online shopping platform - Shoprunner based in Pennsylvania - that offers a guaranteed 2 day delivery, for a $79 annual subscription fee, much cheaper than its direct competitor, amazon Prime.  While occasional shoppers might not be attracted towards such a proposition, heavy users find the offer irresistible. Ma, is alos pursuing innovative logistics solutions.

Perhaps, Ma expects taxi aggregator services would evolve into logistics partners. He has therefore invested in Kuaidi Dache, a Hangzhou-based taxi-hailing app – similar to Uber - & integrated it into its e-com payment ecosystem Alipay. He has invested in Lyft – a US competitor in the transportation network & ride sharing space.

Alibaba Group will invest in appliance maker Haier Electronics Group Ltd in a deal aimed at expanding the Chinese e-commerce giant's logistics reach to the millions of consumers in China's vast interior. China's vast interior is expected to see rapid retail growth as more people move into urban areas and their spending power increases. The logistics for large-size goods is the next nut for Alibaba to crack. Haier's Goodaymart online market has some 90 delivery centres, and a vast network capable of reaching counties, townships and villages.

Conclusion

Alibaba is therefore poised to become a true multinational & scorch the e-commerce & related industries space. While Ma has stepped aside as CEO to become Executive Chairman, in 2013, he continues to guide the company he founded into uncharted yet lucrative territories. A mix of e-Bay & Amazon, Ma’s Alibaba already is but his ambitions seem to indicate that he shall not rest till Alibaba also becomes a Google, Facebook, Zynga Walt Disney & Netflix combined. 

For Alibaba's valuation read Aswath Damodaran, Prof., Stern School's blog. 

http://aswathdamodaran.blogspot.in/2014/05/alibaba-china-story-with-profitable.html

e-Commerce in India: The Roadblocks To The Juggernaut

2014 was a watershed year for Indian e-commerce since valuations soared & off line players were forced to initiate Omni-channel strategies as a counter foil. The year however shall also be remembered for the roadblocks that threatened to impede if not stop the juggernaut. The angsts of the stakeholders,

E-com Marketplace Angst: Logistic Nightmares:

As per TOI, e-com logistics accounts for 10% of the Indian logistics market of Rs 12000 crores. 80% of the shipments travel by air with a per shipment cost of Rs 90/-. Clearly airlines - with their own profitability concerns - would give preference to passengers, not shipments, during the holiday season. The cancellation of about 100 Spicejet flights, at the end of 2014, delayed shipments to Chennai, Hyderabad, Nagpur & North East leaving the sellers red faced with a potential loss of reputation. Players in this emerging space have their futures hinged on “trust” & must tread cautiously on “customer experience” of which timely delivery forms an important part.

Logistic troubles are not a consequence of lack of investment Infact PE (Private Equity) players see in this sector the potential for grabbing “multibagger” returns. As a consequence, logistic players like ECOM Express raised Rs. 100 crore from PE firm Peepul Capital while Delhivery raised $33 million led by Multiples Alternate Asset Management. If investments are not delivering on scale-up schedules, there is a urgent need for creative innovation.

One imaginative innovation would be for larger e-Com players to get together to buy dedicated aircraft for e-commerce shipments; else should increase sellers within a city. Fashion portal Fashionara has already opened hubs in six cities to deal with logistical bottlenecks & expect more to follow suit.

States Angst: Taxes

E-com players were bogged down by litigation last year. The Karnataka commercial tax department. slapped notices on merchants selling through Amazon & demanded online players to pay VAT on goods stored in their warehouses even before customers have ordered for these products. The notices say these merchants cannot register Amazon’s warehouse as their ‘additional place of business’. Maharashtra too, followed suit, with a demand against tele-shopping and e-commerce platform Naaptol.com.

The e-com players contend that they offer a marketplace model where they bring sellers & buyers together & “facilitate” a transaction for which they receive a commission that attracts service Tax – which they have been paying. Since they do not “own” the goods but are only providing the services of storage, delivery and collection of money for the seller, they profess that neither VAT nor sales tax should apply.

Taxmen on the other hand argue that stocking by on line players is a scientific & not a random act & hence there are elements of value addition that should attract VAT.  In addition, they emphasize, that  since amazon stocks goods like a shopkeeper with a buyback clause – stock are returned if products are unsold - the ownership of the goods is “practically transferred” to the e-com company till they sell it. Amazon in a bid to break the logjam, has suggested that a rule making it mandatory for online firms to furnish details of transactions, seller’s identity and VAT collected to tax authorities shall help check on compliance. 

While political intervention has initiated a “glow slow” a more permanent solution is needed for the ghosts of “archaic laws & retrospective taxation” continue to haunt industry.

The Odisha govt. has raised a different but a pertinent issue. Central Sales Tax (CST) is levied at e-com warehouses located in places like Noida, Mumbai, Chennai and Gurgaon, depleting the tax revenues of consuming states as well as denting the  retail trade in that geography. The state has, therefore, called for modifying CST rules. However, implementation of the goods and services tax (GST) shall resolve the problem as it will be levied at the stage of consumption.

Consumer Angst: Issue of Warranty.

Consumers are lured by e-tailers through low prices & the convenience of doorstep delivery. However the issue of warranty is often overlooked with deleterious consequences. Physical retailers often accuse e-tailers of selling much below the “market operating prices” in a bid to boost traffic to increase sales & valuations. In a knee jerk reaction, manufacturers have responded through differential warranty to assuage physical retail which is inherently flawed since warranty has to be channel agnostic in a “consumer is king” world. Surprisingly, however, Lenovo, Toshiba, Sony, Nikon and Canon have either blacklisted e-retailers or cut warranties on products being sold on these sites.

Many International brands have declared that some of their products, if purchased online, are not eligible for a warranty. Online sellers have stepped in to offer a “seller’s warranty” against the original manufacturer’s warranty which needless to say is inadequate. For instance, Tissot, S.A, issues a two-year international warranty while e-commerce websites post it as one-year Tissot India warranty. The consumer, obviously, feels short-charged.

Warranty for “low value” goods might not be as critical to a buyer as much as an allowance for returning goods, if damaged; however, for Hi-Value goods, warranty is critical. Since marketplaces play the role of intermediation, the law does not make declaration of warranty online mandatory, much to the chagrin of the consumers. The govt. needs to step in to remedy the lacunae through legislation.

Conclusion

Clearly while the sector is zooming, each of the stakeholders has their own set of angsts that could derail the sector if not addressed with agility.  The govt. should initiate a debate, release a discussion paper immediately & close loop on legislation rather than being scuppered by a stalled parliament or tying itself in knots on ordinances.

E-Commerce in India: Future is Bright

India is a 2 trillion economy; retail accounts for 30% of GDP. Globally, as per eMarketer, 8.8% of the retail market is e-commerce, while the figure for India is much less. Explosive growth of e-Commerce, in India, is therefore, inevitable. The interest of PE (private Equity) players & the stratospheric valuations commanded by the Indian start-ups like Flipkart & Snapdeal is but symptomatic of the emerging reality. The growth of data users to over 250 million, smartphone sales to over 80 million per annum & increase in internet speeds, courtesy 3G & 4G networks have only accelerated the trend. As per PWC-ASSOCHAM report 2014, e-Commerce users in India shall grow from 40 million to 65 million & per capita annual spent from Rs 6000/- to Rs 10,000/- within the next one year. Apparel & computer electronics shall continue to account for a major share - 42% of e-com. As per Technopak, apart from online retail & lifestyle, newer online business segments like classifieds, real estate, grocery and healthcare shall gain traction. With China out of bounds, such attractiveness was bound to attract the attention of international players.

The international behemoth, Amazon, made an impressive debut, in 2013, & served to expand the market. E-bay on its own as well as through its stake in Snapdeal has done yeoman service, bringing in international best practices. The entry of Jack Ma’s Alibaba into the Indian terrain through the stake buy in Paytm recently shall only accelerate a bloody game where customer acquisition is the name of the game through heavy discounts, aggressive merchandising, flash sales, daily deals & online loyalty programmes. In this dog eat dog game some players like Indiaplaza fell by the wayside, in 2014, failing to raise funds while  Network 18, post an acquisition by RIL, has stopped selling books – a high margin category. Yebhi.com and Bestylish.com changed their business models to become price comparison websites or aggregators for other e-commerce portals Therefore, the stakes in this game are rising rapidly pushing some to emerge as leaders while others scurry for cover. The following trends need to be keenly watched.

Omni Channel Play:

To counter the threat from the emerging e-com warriors, traditional brick & mortar retail players are decisively opting for an Omni-channel strategy – using multiple channels & resources including online & offline – to push sales. Reliance Retail’s e-commerce platform restricted to grocery sales in Mumbai alone is shaping up for a pan India expansion into new categories - selling TVs, mobiles, laptops, home appliances & apparel - in Q4 FY15. It plans to utilize its strategic assets - 700 reliance digital stores - for product delivery & exchange suggesting a shift to an ubiquitous brick & click strategy. Traditional players like Tata have started consolidating their retail ventures & selling through their own e-store as well as through online marketplaces. Surprisingly, they have sold the Tata Value housing deals on Snapdeal with remarkable success. Domestic electronic retail chains like Vijay Sales & Viveks too have caught on the trend & gone online. Aditya Birla Nuvo’s Madura garments & Lifestyle has launched “Trendin” to further its online ambitions.  Future group - drawing on international learnings' of a drop in retail footfalls - has entered into an agreement with amazon to sell its “own store” brands on the latter’s online platform. Clearly one can witness the thrilling blurring of differences between online & offline while the possibilities of imaginative strategic partnerships make this sector truly exiting.

GOSP & Flipkart “Billion day” sale.

There are many players donning the missionary role to attract more users into the marketplace model.  Google, running the “Great India Shopping Festival” (GOSF) since 2012 has witnessed total brand partners increasing from 90 in 2012 to 450 in 2014; companies like HP, Lenovo Group, Tata Housing Development Co, Van Heusen, Motorola Nexus and Karbonn Mobiles have launched their products exclusively at the festival. Flipkart, launched the “billion day sale” in 2014, which floundered due to technical issues not before amassing sales of $100 million in gross merchandise value (GMV) indicating the latent potential of such an initiative;  after all Alibaba sold $9 billion worth of merchandise  on a single day on Nov 11, 2014 commemorated as “Singles Day” & branded as “Double 11”. Therefore expect Flipkart’s next sale to be much bigger.

Sellers are increasingly gravitated towards an E-commerce platform since it allows a pan India launch in an instant - a luxury denied by traditional physical retail.  Analytics makes for targeted selling while Social Media & search engine marketing provide a greater bang for the buck. The biggest lure, however, is the marketing support from e-com players for brands in return for exclusivity

Fight between alternate market place models.

Internationally, Amazon has favoured an own inventory based model while e-Bay has pushed for a non-Inventory based one; the latter, favours bringing buyers & selling onto a platform in return for a commission. Currently, 100% FDI is allowed only in a non-inventory marketplace model; e-bay wants status quo while amazon has been lobbying for change.  Flipkart, started as an inventory based model but hived off its inventory into a subsidiary WS retail to conform to the regulations. Snapdeal meanwhile favours a non-inventory based model subscribed to by its investors Softbank, e-Bay, Ratan Tata & Premji.  E-com regulations need to be model agnostic & if implemented shall accentuate demands on the government to revisit the FDI policy in multi brand retail

FDI in multi brand retail

The much controversial policy on FDI in retail was passed by the previous UPA regime with the caveat that individual states were at liberty to take a decision regarding market entry. AAP, while in office in Delhi, reversed the previous Congress governments’ permission for retail entry; the BJP, heading the current central government, has not revoked the law but has revealed its displeasure on retail entry of multinationals, citing the fear of a likely decimation of the mom & pop stores. It is difficult to fathom how protecting the interests of 12 million retailers – not all of whom would be decimated by organized retail expansion- is more important than the interest of 600 million farmers - who would gain through better prices through reduction of intermediation  - or the 1250 million citizens  - who shall gain through lower prices & reduced inflation. It is pertinent to note that participation in a marketplace helps retailers - currently constrained to a  local geography – to expand their catchment areas nationally & going forward, hopefully, internationally too. Any attempted by trade to counter e-com expansion shall invite the ire of consumer groups. Simultaneously the massive growth in e-com has raised the shackles of organized retail which is seeking parity. Customers, ultimately, are interested in experience, convenience & affordability & see no utility in managed differences between traditional brick & mortar retail – organized or unorganized - & on-line commerce. All the above vectors shall converge & ensure that FDI in retail, eventually, shall become a reality.

The e-com sector is therefore replete with exciting possibilities & is therefore the buzzword both on campuses & boardrooms.  The revolution has only just begun. Stay tuned!!