E-com­merce Ag­i­ta­tions: Why this Kolaveri Di?

DQ Channels - - Cover Story - RA­JNEESH DE/ ra­jneeshd@cy­berme­dia.co.in

The ag­i­ta­tion by chan­nel part­ners against preda­tory pric­ing strate­gies of e-com­merce sites is not just gain­ing mo­men­tum but en­ter­ing a cru­cial stage in var­i­ous parts of the coun­try. In try­ing to sort out some of the con­tentious is­sues, es­pe­cially forc­ing the OEMs/ven­dors to take a stance, threats of bandhs and strikes are be­ing bandied around. Though, true to keep­ing open all chan­nels of ne­go­ti­a­tions, the dates of th­ese bandhs are con­stantly get­ting resched­uled.

While in prin­ci­ple I agree that it is a se­ri­ous is­sue and some of the ac­tions taken by part­ners are def­i­nitely mer­ited, in some as­pects I feel that things are blown out of pro­por­tions and many of th­ese ac­tiv­i­ties might lead to noth­ing. And be­fore many of the part­ners start cas­ti­gat­ing me, let me make my­self clear that my ex­pe­ri­ence in deal­ing with var­i­ous stake­hold­ers of the IT in­dus­try (ven­dors, part­ners and gov­ern­ment of­fi­cials) that gives rise to this feel­ing.

Firstly, and again at the ex­pense of fac­ing the an­gry wrath of many, I sin­cerely doubt the unity of chan­nel part­ners and chan­nel as­so­ci­a­tions. When even part­ners be­long­ing to one as­so­ci­a­tion in one par­tic­u­lar city work at cross-pur­poses for their own busi­ness benefits at the detri­ment of over­all city’s IT health, what chances are there of mul­ti­ple as­so­ci­a­tions from so many dif­fer­ent re­gions of this vast coun­try with their dif­fer­ent mar­ket dy­nam­ics will re­main united? There are ev­ery pos­si­bil­ity that even ven­dors or e-com­merce sites the selves can play up cer­tain as­so­ci­a­tions to ruin any chances of a united fo­rum suc­ceed­ing.

Sec­ond, in many cases I sin­cerely doubt whether all part­ners who are shout­ing hoarse against on­line re­tail­ers and their pric­ing shenani­gans, are them­selves not will­ing part­ners them­selves? For ob­vi­ous rea­sons, I can­not take names, but let me say with re­spon­si­bil­ity that one prom­i­nent part­ner head­ing one of the ag­i­tat­ing as­so­ci­a­tions is him­self one of the big­gest sup­pli­ers for Snapdeal. One can ob­vi­ously be­lieve that this talks of busi­ness lais­sez-faire, but does not this in any lit­tle sense also smack of hypocrisy?

Third, I gen­uinely doubt the ex­tent of the dam­age that is ex­pected. For one, on­line re­tail sites pri­mar­ily im­pacts only the part­ners deal­ing in con­sumer chan­nel. While con­sumer chan­nel would ac­count for nearly 40% of over­all chan­nel rev­enues, how many part­ners are there who solely de­pend on them and not delve in the en­ter­prise chan­nel front in any way? Also, it is pri­mar­ily lap­tops, tablets and mo­biles that are un­der theat—prod­ucts that have got so much com­modi­tized so long back that there are hardl any mar­gins on them. Part­ners any­way were depend­ing on so­lu­tions and ser­vices—and th­ese are not un­der threat as e-com­merce sites do not of­fer them.

Fourth, while e-com­merce sites, in some cases, are in­dulging in preda­tory pric­ing, any­one with a bit of busi­ness com­mon sense can see that things are soon bound to get ra­tio­nal­ized. The big sugar dad­dies cur­rently fund­ing th­ese e-com­merce sites now and al­low­ing them to ab­sorb hu­mon­gous losses will not dole out the moolah much longer; then most on­line re­tail­ers will fol­low fis­cal pru­dence and pricng dis­ci­pline. Be­sides, as the in­dus­try ma­tures there are bound to be gov­ern­ment reg­u­la­tions and more in­stances of cor­po­rate gov­er­nance to stop fi­nan­cial ir­reg­u­lar­i­ties.

I can list out ten more rea­sons in sup­port of my con­tention, though even I would agree that one good thing that might just come out is the for­ma­tion of a na­tional as­so­ci­a­tion for chan­nel part­ners. A sort of like a Nass­com for IT chan­nel. How­ever, loose or con­tra­dic­tory might such a fed­er­a­tion be ini­tially, there are bound to be dif­fer­ent is­sues where they can bring part­ners from across the coun­try on a com­mon front. But whether plan­ning for ven­dor boy­cotts on e-com­merce stand is one such is­sue, I have a great doubt. In fact, with the global con­sumer trend of go­ing on­line, I feel that the writ­ing is on the wall and fight­ing against it is same as Don Quixote fight­ing the in­vis­i­ble wind­mills.

Bor­row­ing the lines that be­came such a rage a few years back, my ques­tion to ag­i­tat­ing part­ners is “Why this Kolaver, Kolaveri Di?”

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