Distribution of consumer goods - the e-commerce way or the traditional way?

The internet is changing the lives of people around the world so much that it is as good as a daily commodity. Santhosh Muruganantham, founder of Kolapasi in Chennai, India, mentioned in a meeting, "Apps like Swiggy, Foodpanda have made people so lazy that they don't even want to cook two minute noodles at home, but they rather order it online". One thing that is creeping up in this situation is the retail distribution of consumer goods. Research has found that India's digital economy will be a $1 trillion a year industry by 2022. This is so insane but at the same time sane enough because of the amount of internet penetration that India has. So, why is it in a company's best interest to have an e-commerce model over a traditional model for distribution, especially in India.

Yes, there is a majority (70%) of Indian population that lives in rural areas but internet penetration is growing in these areas too. The internet penetration is at around 20% as of 2017. This accounts for around 185 million people. Even if this remained the same now, companies can have 185 million more people if they adopted an e-commerce model. By adopting this model companies can not only sell their products, but they can also reach them through advertisements. If you want to know how Facebook ads are beneficial in brand building please read my previous article. It is becoming a norm now to advertise directly to consumers and then convert them to customers.

Quantified Commerce an e-commerce company's co-founder, Agam Berry mentioned in an article, "India loves deals". He feels that by adopting an e-commerce model they will be able to offer lower prices while not sacrificing on quality. The savings that the company does by eliminating an employee at a retail store's counter can be offered to the consumers.

Most stores in the USA have a variety of brands available when you walk in, but Indian stores aren't the same. There are limited number of brands available and that is where e-commerce can bring in a limitless variety of brands for the consumers.

With big companies entering the e-commerce market of India, one can expect the downfall of the traditional distribution in India for consumer goods because there are very few companies that do not sell in a multi-brand store and this can be an added advantage for e-commerce companies going forward.