E-commerce marketplaces: The real impact is on sellers
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As the great debate over e-commerce rages and experts at both ends give us rationale on why the billion dollar valuations are either justified or not, my take is that we are looking at this from the wrong end. In my opinion, e-commerce is a game changer as it gives suppliers access to new customers and not because it enables consumers to buy things at the click of a button.
The digital economy will change the lives of sellers or merchants as they are popularly called and that is why it is valued at the level it is. The change in lives happens because the neighborhood shop owner can now earn 3 times more than what he would earn earlier. All this because of the wonderful thing called the internet which is the largest single market in the world.
This creates a powerful spiral as in the online world only the efficient will survive. The rating system and the marketplace rules will ensure that the sub standard sellers are weeded out and the mediocre will need to pull up their socks. The earlier “location” based model for sales that is any person who had prime location had an unfair advantage when it came to sales is over. In the internet marketplace only the “efficient” will survive.
This creation of a global playing field for small and medium-sized merchants that make up 90 percent of the world's commerce by giving them the opportunity to sell to larger markets than they could have otherwise accessed is the real WIN for e-commerce.
Nowhere is this more visible than what one sees at Uber and the way they have changed the lives of the taxi owners/drivers. For me, the value of Uber does not come as consumers can take taxis but in the impact that it is having and will continue to have on the small entrepreneurs who own 1-10 taxis. Their lives are changing and in a manner and speed that was impossible to predict even 2 years ago!
In this made debate of multibillion dollar valuations and who will win and who will lose debate for internet companies, the main point of the way these companies are actually changing lives for the millions of small and medium business owners is getting lost.
For me that is the biggest power of the internet and e-commerce, it will level the playing field for entrepreneurs and the ones that will thrive and grow will be the efficient ones and not the ones who have a “rental” model mentality that is sacrifice excellence and efficiency at the altar of real estate.
To sum up, I feel we are only at the beginning of the internet story and the changes that we will see in the next decade on how it actually changes lives of business owners will make the last decade seem like a movie trailer.
More power to e-businesses and hope their tribe increases!