While e-Commerce is paralysed for low literacy rate and Internet penetration in India, S-Commerce is catching up fast creating a new industry of re-distribution of services
Despite e-Commerce existing in India as a business model, only 5% of the Indian population uses it as a regular option. India might have created a place for it in the global technology space, but when it comes to the common man, he is yet to receive the benefits of the technological developments. Problems like lower literacy level, lack of computer/Internet penetration and operating knowledge, resistance for an online transaction siting security concerns are some of the core issues for which e-Commerce has failed to gain ground in this country.

One of the solution to these problems is ‘S-Commerce’ (Service-Commerce). The S- Commerce model is a shift from traditional e-Commerce model, where products and services are available on the Internet and it aims for the remaining 95% of the country’s 1.5 billion population. The services include railway ticketing, bus ticketing, air ticketing, mobile & DTH recharge, travel & tour packages, insurance premium payment, bill payment, loan origination, movie ticketing, horoscope, study materials, et al. S-Commerce not only addresses the challenges faced by e-Commerce, but also goes a step ahead to comfort those who want to avail the benefits of technology without having the infrastructure or knowledge to those who want to have the facility of multiple modes of transaction, including cash. Consumers can now walk into their neighbourhood convenience stores (Kirana / Provision /General / medical stores / PCO/STD booth/cyber cafe / travel agents / Telecom shop et al) and purchase all kinds of ‘Services’, without having to pay any extra fee.

S-Commerce is the way ahead for creating the convenience for the consumers. It has also led to creation of a new industry of e-distribution of services. The idea is now accepted across 20 states by around 21,000 outlets, and this indicates how fast the platform is gaining ground in India.

However, being the first one to initiate such a service, the path wasn’t smooth for Suvidhaa. The concept of S-Commerce was alien to people. Creating recall value and brand recognition along with acceptance was a great challenge. But as they say, nothing is constant, things changed. Today, retail players are looking for more and more touch points to reach out to customers. They are aiming at cost optimisation at both micro and macro levels and developing new means to attract customers as the latter are ready to spend money for the right product. And in order to achieve faster growth, the retail sector is expected to extensively leverage technology, the benefits of which will slowly start reaching out to masses, thereby resulting in faster growth for the retail sector, and for S-Commerce.

The rural part of our economy is still untouched by credit cards and mortgages as known in the West. Perhaps this is one of the reasons for which the rural markets are insulated from the global meltdown. There are several factors which have led to an increase in rural purchasing power. However, irrespective of these factors sectors like FMCG, automotive, retail and telecommunication have benefitted from the rural prosperity. Taking this opportunity ahead, various service providers are now penetrating deep into the country through the S-Commerce route.  And the main reason is that consumers do not need to have a credit card to avail the service and they can avail it even at the nearby grocery store. Moreover, the platform has been built in such a way that it may not be very long when we see the differentiating line between rural and urban India diminish as far as the availability of products and services are concerned. The S-Commerce route would definitely bridge this gap and make various offerings available under one roof.
As told to Vareen Gadhoke Ray

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website