Leading organizations will win hperlocal delivery via innovative business models in emerging markets

Abstract

Over the last decade, innovations in business models across sectors like automobile, tourism, entertainment etc. have created new opportunities and threats for players. These disruptions have led to the creation of values and has seen rampant success. While few of these business models have been extremely successful in developed nations like United States and Europe, they have met with mixed response in developing nations like India and China. For example, Amazon Seller Services reported a loss of $ 510 Million in FY16 and $800 Million in FY19 due to 15.6% increase in expenses. There was increased spending on delivery with delivery expenses rising by 23.8% to $ 520 Million1 . With increased regulatory pressure in India that prohibits them from entering exclusive deals for selling products and launching private labels, these companies need to rework their business models. As both Amazon and Walmart go omni-channel, build sourcing and delivery capabilities for grocery and food products and opens dozens of grocery stores, it needs to learn lessons from developing nations and shape its business models. As firms like Reliance enter the Indian ecommerce & hyperlocal delivery and create a disruption similar to one in Telecom Sector leveraging its vast scale and group of companies it owns, it is imperative for incumbents to be proactive. Similarly, firms like Movile in Brazil and Alibaba in China are creating entry barriers for global firms like Amazon.