When the changes by both producers and consumers are in sync, Big changes happen in the markets!
The transfer of the markets across the globe from the principle of Caveat Venditor to Caveat Emptor not only gained momentum to develop the quality of one’s product but also reemphasized the fact that consumers are more than just profit making or revenue sources. Since, the realization of this principle the markets have been focusing more and more on their consumers. The recent trends now imbibe the social responsibility part also as firms tend to move towards more sustainable and environment friendly ways of producing, willingly or unwillingly.
Human resource plays a crucial part in running the local, nation as well as global economies. The same people who consume a good are producers of another. Thus, one can rightly say that people are consumers, workers, producers, voters and everything else we can bring into consideration.
But, one fact that remains underneath is the immutable prowess enjoyed by the consumers in markets as they are the ones who can transform the way the world works by shifting their choices from one product to another whether by their own will or by the force of any third-party situation.
With the introduction of right set of facilities and technological advancements this customer power has grown wider than ever with their freedom to choose goods. A freedom not limited by their demographic or geographic restrictions. With this, the power of market dominance and control, which majorly lied in the hands of big developed countries for times immemorial (especially the United states of America), is getting more and more decentralized with a customer in a foreign country having an equal or perhaps more value than a customer in one’s home country.
The central focus on shopping has been shifting with the spotlight getting dimmer on America and brighter on other Asian nations.
Perhaps, these consumers are working towards changing the way capitalism works -for the better.
Today, the shopppers in America are no longer crazy about just American brands. Similarly, no Indian is buying just Indian brands. The point being, the exchange of producers and consumers has widened ever than before so much so that last year China and America were almost in an equal competition as the world’s biggest retail markets. The two biggest online market places controlled by the Chinese are Alibaba’s Taobao and Tmall. Both of them did more third part business than the American business juggernaut- Amazon. There was a time when the American consumers were ahead of the rest of the world with their shopping catalogue and the malls. But, that history now with Asia’s shoppers being the front runners in the retail innovations with the new shoppers not only being value conscious but also give more and more salience to the ethical, social and political values in buying a product or in associating themselves with a brand. For instance, consumers today tend to prefer brands that more environmental credentials and supply chain standards or support trends from veganism to reducing carbon footprint. In fact, Kraft Heinz, one of the biggest and most popular Western food giants, is working towards rebranding itself as a force for environmental cleanup.
These trends and changing consumers preferences should not be dusted off easily by claiming them to be mere virtue signalling or a fad. Capitalism and the corporate world have long learnt their lesson of adapting to the dynamic society’s changing preferences. Markets are highly manipulated and determined by government regulation and laws. These are again influenced by people in the form of voters, at least in democracies.
Although the consumers enjoy a good share in the power, the companies are not just puppets. They have their own share of virtues and speculative tendencies. Thus, when the changes by both producers and consumers are in sync, big changes happen in the markets. Mostly, for the good.
The final big change that has happened recently is the “digitisation of markets”.
Well, just like any other topic, this has its own defenders and attackers too with many people worrying about these dominant retail platforms such as Alibaba and Amazon eating up the real essence of commerce and leaving shopping centres empty and more people unemployed. The people who refute this statement believe that technology, on the contrary, provides more accurate and voluminous data about consumers’ shopping patterns allowing consumers to access a more varied world and more variety of options in which the shopper has the liberty to decide whether they want to place online orders for a product or visit a store to buy it. They also have choices like whether they want to purchase something from an individual brand store or a mall. Thus, these people that the internet and technology does not kill physical stores rather created a more direct relationship between the producers and consumers, squeezing the middlemen out of the supply chain. The popularity of e-commerce was boosted during the pandemic with world-wide ecommerce sales touching a benchmark of 4.2 trillion dollars in 2020.
These technological innovations not only help the customer to reach a large variety of brands and products but also allow the producers to tap newer and potential markets. For instance, there exists a Canadian owned tech platform called Shopify. It gives brands to list themselves on its interface and bypass Amazon. The tech platform, last year, sold merchants’ goods costing as much as 120 billion dollars. This is nearly double the level of sales it recorded in the year 2019. In fact, Shopify hosts the first ever sale by a first time retailer every 28seconds.
There’s another e-commerce firm names Pinduoduo in China which was started in the year 2015. This year, people are expecting it to overtake Alibaba in terms of number of users. This sounds likely because it is enabling Chinese villagers to club together and buy groceries via online mediums. Other big corporate companies such as Nike are depending more and more on their websites and vending machines to attract sales rather than depending on wholesalers and selling trainers.
Going one step ahead, many retail juggernauts like Walmart are going “omni”. This means that they are planning to run or perhaps already running both online and offline stores. They are also constantly diversifying into and exploring new services to keep their digital customers happy and satisfied. In fact, America’s biggest business Amazon has also opened its first cashier less grocery store in Ealing, London.
Thus, it won’t be wrong to say that the customers and businesses together bring a transformation shift in any market. And this new shift towards digitization is right ahead of us with endless new aisles to discover.
