E-commerce reshapes shopping, but are consumers at a disadvantage?

The new issue small businesses are facing is that platforms are becoming advertising media as well, competing with Google/YouTube and Meta

Do consumers love e-commerce platforms, or do they approach them with suspicion? Is there a need to protect consumers from ecommerce players? An editorial in this paper (January 28, 2025) pointed to the draft guidelines put out by the Bureau of Indian Standards. Is there a need to further regulate e-commerce players?

 

Ecommerce has been both a blessing and a curse. It is well known that the bookshop business, both in India and around the world, has not recovered after the onslaught of Amazon. Prophetically, the owners of the much-loved bookstore Landmark sold their business to the Tatas just a year or so before Flipkart was launched. But e-commerce has also been a boon for numerous small businesses that can now access consumers across India. At a seminar organised by the Ayurvedic Product Producers of India, Amazon made a presentation on how they are helping many of these businesses take their products across the world.

 

However, there is a problem that some small brand owners are worried about. Since platforms like Amazon and Flipkart own customer data, what happens if they launch their own copycat products as a ‘basic’ line? To protect small businesses, there is a regulation that a platform cannot be a merchant. Unfortu­nately, there are ways to work around this issue. But by and large, companies, big and small, are satisfied with this rule and are not feeling overly threatened.

 

The new issue they are facing is that platforms are becoming advertising media as well, competing with Google/YouTube and Meta. So, if you don’t have enough brand pull, you may be arm-twisted, cajoled, or nudged into spending more on promoting your brand on the platform. The new variation of ecommerce — Qcommerce — is following the same patterns. The overall feeling among marketers is that e-commerce and Qcommerce are reducing friction in the last mile and will definitely stimulate consumption.

 

Coming to consumers, what do they think about ecommerce? Are they worried that ecommerce platforms are tracking their movements on the web? Are they aware that e-commerce platforms may be modifying prices depending on the smartphone they use?

 

We often talk about the global information deluge and how we are drowning in data. What about the lay consumer? Are they hassled by this information tsunami? Global research has shown that consumers are actually quite happy with the additional information available to them. Yes, when it comes to purchasing, consumers may get troubled if you throw too many options at them (Paradox of Choice Theory). However, they seem to appreciate the ability to check reviews for just about any product or service. They are also becoming adept at using comparison websites.

 

E-commerce platforms have recognised consumers’ voracious appetite for information. Platforms like Nykaa and Myntra now offer not just products but also an unlimited amount of content for consumers to devour. Offering additional content helps them build stronger connections with consumers and improves platform stickiness.

 

Then there is the potential problem of ecommerce platforms manipulating prices depending on the smartphone, time of day, or location. This is difficult to monitor and police. Even your neighbourhood fruit vendor will adjust prices depending on the car you are seen driving or the time of day. I experienced this recently at Dadar (Mumbai) market; the corn vendor gave me an extra ear of corn, probably because I was his last customer for the day. Does this mean the corn vendor had been cheating all his previous customers? Most definitely not.

 

Indian consumers are smart. They are able to practice webrooming and showrooming with equal skill (see Business Standard, March 2, 2023, for my article on this topic). They navigate across general trade, modern trade, ecommerce, and now Qcommerce. As the MD of one of India’s most successful lifestyle companies told me a few years ago, the consumer who buys a watch in a watch retailer is different from the one who buys it in a department store, who is different from the buyer at the company store, and who is different from the one buying it online. Chances are while you have your preferred destination to buy, you may be visiting multiple touch points before moving to the last stage.

 

It is encouraging that ecommerce platforms are being told to self-regulate and avoid both price gouging and price baiting. It is also good that authorities are laying down guidelines for platforms to follow regarding how search results are displayed and the limits on consumer information that can be shared with merchants. I am confident that Indian consumers are getting smarter by the day and will successfully navigate these and other changes that will be thrown at them.

 

The writer is an independent brand strategist and founder of brand-building.com; he can be reached at ambimgp@brand-building.com