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One of the major groups in the sellers segment in India is Micro, Small and Medium Enterprise (MSME) and Small and Medium Enterprise (SME). They are backbone of Indian economy and engine of growth, economic development and job creation. In the year 2014 SME sector contributed 45% of India’s industrial output, 40% of total exports and 17% of GDP. SME in India add over 1.3 million jobs per year. Government of India initiatives like Make in India, Digital India, Skill India are programs for improving their growth. The vision is to boost SME contribution to India’s GDP to 20–25% by 2025 [36] by facilitating growth of SME in country and to enable them to participate in the growth of digital marketplace. The digital marketplace will act as a catalyst to SME with increased revenues and margins, improved market reach, access to new markets, less marketing cost and customer acquisition. China which is the largest e‐commerce market in the world has a great role played by SMEs. In china the SME’s contribute 60% to GDP and 75% to urban employment [37]. China acts as a good lesson and example to India in this regard. India’s largest bank, State Bank of India, has partnered with Snapdeal to offer loans to SME. The bank uses data analytics gathered by Snapdeal to assess sellers credit worthiness instead of standard documents like balance sheet and P&L [38]. SME’s would be a major contributor for the growth of digital market place in India in the coming years.
74.3.3 Online to Offline
Another innovative model which is the next big thing in the online market place is online to offline (O2O) model, estimated to be one of the fastest growing models. Typically in this O2O model a consumer using a website or mostly apps will book a service online and make purchase offline at a restaurant, cab or a gas station. AirBnB and Uber operate on app based O2O model. There are three key aspects to this model [39]. One is that the deals here are hyper local, real‐time and the prices can fluctuate really quickly. Secondly, it usually involves a ‘perishable services’ like restaurants, movie tickets or a similar product or services. Finally, the deals are offered online and the actual transaction takes place offline. Mobile payment will also get a boost with O2O model. According to HSBC Chinese O2O market is more than USD 150 billion with just 4% penetration. Alibaba sees this as a growing and attractive model in China [40]. In India, Paytm is trying to replicate the Chinese parent Alibaba’s strategy. When other players like Flipkart and Amazon are building their warehouse capacities, Paytm has added none and adopting the O2O model and this strategy differentiates them. Another pioneer in this model in India is Little. The O2O model would be a key model in Indian online market place.
74.3.4 Price and Loyalty Programs
In the early stages of e‐commerce in India, the major challenge of market place players like Flipkart was making customers switch to online. This was done by offering heavy discounts. With the growth of e‐commerce the customer retention and loyalty has become a big challenge. In a recent survey by PWC reveals that along with good price, trust in the brand is also equally important aspect. Recently Amazon has launched its Prime service in India an offering that has helped it to build customer loyalty. The subscriber gets thirty minute early access to daily deals in app and website and faster delivery [41]. Flipkart is now set to replace its existing loyalty program namely Flipkart First with a new version called F‐Assured to take Amazon’s Prime [42]. The F‐Assured comes with improved service and stricter quality checks a better return policy and next day free delivery service. These loyalty services could be big game changers for the Indian digital market place.
74.3.5 Vernacular Languages
India has 88% non English speaking population and Hindi is the largest conversed language. Officially there 22 languages in India. In rural area 64% of the users browse the content in their regional languages which will enhance the user experience of app and website. As of June 2015, the local language internet users are 127 million in the total users of 269 million growing by 47% year after year as per survey conducted by IAMAI. With increasing users, many online marketing places have started displaying the product information in local languages. Snapdeal was the first online market place to launch regional language versions. Vernacular language in website and apps will be the game changer for digital marketplace in the coming years.
74.4 The Outlook
The first wave of Digital Marketplace 1.0 started in India with very limited companies, few travel aggregators and online classified websites. The market place players in India adopted the hybrid model (inventory + market place) or Inventory model, adopted by Amazon in the US. The challenge during this wave was to bring the users to the habit of online buying and building the ecosystem for an online market place, which was done by offering heavy discounts and promotional sales. In the second wave Digital Marketplace 2.0, the leading players like Flipkart, Snapdeal and other companies migrated to a purely managed marketplace model. This was because of the success of marketplace model in China and the customer, market, income level and the distribution in India were more similar to China. There were also regulatory restrictions in India.
Today India is at an inflexion point of online market place growth. With the Smartphone penetration, mobile internet and online demographic advantage, India has the highest online retailing growth rate in the world. Indian economy is also showing a good sign of GDP growth of 7.5% in the year 2015–16. The four key pillars of e‐commerce, namely payment landscape, logistics, mobile/internet infrastructure and business and revenue model, are undergoing innovations and transformations. In addition to transform retailing, the digital marketplace companies in India are also facilitating the MSME sector by financing, technology and training. The developments and transformations will also bring the next generation of internet users (rural based, mobile centric, local language focused) online. With this, the digital marketplace growth in India is also predicted to reach USD 100 billion by 2020. Entry of more multinational online retailers will make the online marketplace more competitive. These factors will propel India to enter into the third wave of Digital Marketplace 3.0 which will be the golden era of Digital Marketplace in India.
74.5 Conclusion
In this paper, we have analyzed the revolutionary growth of the digital marketplace in India. The key market players in India, their unique challenges and opportunities are also analyzed. The digital market place infrastructure in India is analyzed in comparison with other emerging and developed market places. The issues related to hyper competition and customer retention, logistics, payment, financing, valuation and regulations are also discussed. The key emerging trends such as retailers going online, supplier development, loyalty programs and support for vernacular language are also presented. The innovative practices, processes and models presented in this paper can serve as a template for digital marketplace evolution in the emerging markets.
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© Springer-Verlag GmbH Germany 2018
Claudia Linnhoff-Popien, Ralf Schneider and Michael Zaddach (eds.)Digital Marketplaces Unleashedhttps://doi.org/10.1007/978-3-662-49275-8_75
75. Digital Revolution, High-Speed Democracy and the Brave New Working World: Learnings from an Austrian Public Online Consultation Process
Peter Reichl1 and Andreas Kovar2
(1)University of Vienna, Vienna, Austria
(2)Kovar & Partners GmbH, Vienna, Austria
Peter Reichl (Corresponding author)
Email: peter.reichl@univie.ac.at
Andreas Kovar
Email: andreas.kovar@publicaffairs.cc
75.1 Introduction
While the rise of the World Wide Web and the evolution of the Internet into a global information infrastructure have started merely two decades ago, already now the rapidly increasing level of digitization has led to a new economy of immaterial products and services. With the advent of the Internet of Things (IoT), an entirely new industry with novel value chains and networks as well as new forms of logistics is about to be created. There is a broad consensus that this digital revolution will have funda
mental impact on the future society, especially with respect to the future working world [1], and therefore has to become a central topic in the political discussion, while, at the same time, it will provide also the new tools, mechanisms and platforms for leading the discussion itself.
Recognizing the urgency and complexity of the topic, in July 2015 the Austrian Federal Council has started a parliamentary initiative which has led to compiling a state of the art report exploring the consequences of digitization on tomorrow’s working environments, quality of life, society, politics and democracy. This so‐called “Green Book” [2] provides a comprehensive overview on potential legal and political changes which are required for Austria to be in a position which allows to make use of the presumed huge opportunities of the digital revolution, and has become subject of a parliamentary enquiry (“Enquete”) held at the Federal Council in Vienna on Nov 18, 2015.