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Transition from Traditional Supply Chain to Digital Supply Network; A Win-Win for All Or……????

Disruptive technologies are undoubtedly altering the canvas of the traditional linear retail supply chain into a refined version of digital supply network and bringing in the immense benefits to the businesses, start-ups, SMEs and large enterprises and other players in the entire eco-system. This disruption in retail has created a space for new entrants such as tech-start-ups, corporate giants, etc., and brought in new improved shipping solutions; elaborated shopping experiences; and enhanced agility in business functions and operations through augmenting productivity, efficiency and reducing costs and efforts. However, this enhanced efficiency, digital upgradation, and technologically advancement always incur a financial and social cost. In a developing country like India, we need to critically assess that whether we as ecosystem players, from a small unorganized retailer to a small wholesaler or distributor operating in limited markets and minimal market margins, are prepared and capable enough to bear this cost.

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Tech-enabled retail is incontrovertibly an opportunity waiting to be leveraged for huge benefits. And, the conventional disruption and digital transformation have attracted the attention of many new aspirant entrepreneurs, well-established corporate giants to encash this opportunity and nudge for a space in traditional retail ecosystem. Most of these new entrants are introducing technology solutions but only on the selective nodes of the traditional supply chain and blurring the lines of offline and online channels or physical and digital space. Their horizontal solutions are taking over the space of existing players on the particular node of supply chain. For instance, a platform with a large distribution network that has managed to acquire larger supplies for distribution of certain products, chances are it may monopolize the distribution of goods to retailers jeopardising the business of many small distributors and entrepreneurs. Operating on one or two nodes, most of the new entrants arecreating an imbalance and leaving small operators in the segment to either struggle or get out of business.The scale and speed of disruption, which is favouring big sellers at the expense of small operators in supply chain, is more likely to create a conflict between traditional distributors, manufacturers/processers and new entrants.

In this changing scenario, financially well-equipped, thriving brands and retailers are reinventing themselves to meet customer needs, stay relevant and remain profitable. However, for the lesser known and/or unknown brands, unorganized small retailers, small scale distributors, this is an altogether different story. For themtechnologically advancement, financial infusion and well-organized business operations have become their only chance to survive in new digital world which has irrevocably shifted the markets from product to customer experience. Only a complete alternative model providing vertical solutions for all nodes of retail ecosystem can create a win-win situation for all.A model with the holistic approach and the capability to organize millions of unorganized retailers, small wholesalers and distributors, to provide them with the opportunity to expand their customer base and markets and bring in the best of both physical and digital world, is the future of retail.


(By Debarshi Dutta. The author is the co-Founder and CEO of Ayekart Fintech)