- Jay Bhuva
Union Budget 2020 India: The upcoming union budget is an opportunity for the government to introduce a comprehensive regulatory framework around e-commerce and rollout equitable measures that enables inclusive economic growth through MSMEs, startups, medium & large enterprises. Digital is continuously moving the goalpost for retailers as they strive to align with changing consumer preferences; it is blurring lines between physical and online shopping and as a result -buying journeys have intertwined across engagement channels.
New technologies have fundamentally changed how consumers explore products, compare prices, verify quality and make payment for their purchases. In the wake of overall economy getting formalized, retailers have realised that embracing technology is more than just a choice – it is a mandate to stay relevant and thrive.
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While businesses of all sizes have been exploring digital sporadically across value chain functions, getting it right could appear to be a daunting task. Considering the evolving consumer preferences and the latest technological innovation in the areas of cloud, artificial intelligence, mixed reality and 5G; listed below are the key themes that
businesses can explore this year to maximize outcome and scale:
- MSMEs have traditionally been laggards in adopting technology; and until recently – majority were limited in their efforts in this area to only start accepting digital payments. However, modernising their Point of Sale (PoS) and bringing inventory online to integrate with online players for them to leverage their last mile delivery network is soon becoming the new normal. Digital MSME programs run by government compounded by the advent of cloud based AI-first solutions – MSMEs can upskill their staff and embed low-cost technology components to optimize operations and grow profitably.
- Startups are amongst the firsts of businesses to take the advantage of building their organizations digital-first and operate with data-driven insights. Startups with their ability to engage and acquire customers on digital channels can achieve significant scale through symbiotic relationships and an ecosystem of partners. Not only can they challenge status-quo through their innovative business models, but they can also monetize their technology platform through alliances and ecosystems. Startups can leverage India stack and take benefits of government policies to manage their costs and aim to turn profitable faster.
- Established brick-n-mortar players have been experimenting with building their own e-commerce engagement channels and integrating legacy systems with digital platforms. Retaining their current customer base and increasing their lifetime value could become increasing difficult due to complicated buying journeys and new market entrants; amplifying their core competencies and building a differentiator at their stores through in-store technologies, endless aisles, seamless online-offline journeys can position them stronger amongst competition.
- Large Enterprises have an uphill task to engage with different consumer segments at more human level through personalised engagement that is consistent across channels. Re-platforming legacy systems, introducing cloud based solutions and running a connected & responsive supply chain that is capable to self-learn through blips and persistent trends of market will become an imperative for them to relevant and compete. With the increasing cost to acquire customers on digital channels; more enterprises will turn to partnering with startups or building capabilities in-house and adopt a culture of experimentation.
The government can play a critical role by being an enabler and catalyst for businesses to rewire for the future through rolling out balanced initiatives across the board.
Further extending on India Stack with UPI enhancement, video KYC and identity services along with incentivizing businesses on adopting the same could be a great stimulus.
Needless to say a comprehensive e-commerce policy encompassing social media and data protection regulations are key pillars for the digital economy to thrive.
Rationalising GST for online-offline could be considered to help organizations build customer centric businesses. Continuing to rollout welfare schemes and central projects such as AMRUT and Bharatmala will aid inclusive growth of Tier-2, 3 cities and help build smart rural communities important for sustainability.
While creating wealth is a task for private/public businesses, providing a conducive environment through regulatory framework and stable policy structure is where government can help.
Macro expectations from the union budget 2020 are around boosting consumption, creating jobs and protecting MSMEs against MNC players – enabling businesses to deliver to consumer expectations would be fundamental to its effectiveness – after all, the preferences of finding the right product, for the right price, and getting it conveniently have only become more important in the digital age.
And finally, the expectation by the corporates is for the Government to give tangible and cash benefits to them as incentives to encourage them to use new technology and innovation in their day to day operations to build efficiency. So all eyes on the Finance Minister to unveil the most awaited announcement of the year – Budget 2020 on 1 February 2020.
- Jay Bhuva is Director, Deloitte India. Views are the author’s own.