New Commerce: Everything is going nano - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

New Commerce: Everything is going nano

Jul 30, 2010

We found the theme of new commerce, mentioned in the Infosys FY10 annual report very interesting. It talks about how consumer behavior has changed due to the evolution of technology. Well, actually one did not really need a leading technology company to tell you that. This phenomenon is all around us. It's based on our personal behavior. And our interactions in the market place.

We would rather pay for a single song which we like on iTunes (Apple's online music retailing store) versus spending on an entire album. Anyway, we usually end up listening to just one or two songs which we like from the whole album. Vodafone users in India can send 15,000 SMSs a month for Rs 150. This works out to 1p/SMS and it can be sent to local as well as national numbers. If you have relatives all around the country, why would you spend Re 1/SMS to keep in touch. You would then be paying a 99% premium. The US$ 35 solar powered touch-screen laptop developed in India has also generated a lot of buzz. This laptop, if developed at these low costs will revolutionize education in India. Since it was announced it grabbed almost as many headlines as the revolutionary but costly Apple iPad.

Applications for smartphones can now be downloaded for a few dollars each. Small ticket size loans (micro-credit) are offered for a minimum of Rs 2000 by financers such as SKS Microfinance and other microfinance institutions. Soon these small loans will be as common in Indian villages as a Coke. Thus sellers now need to really adapt themselves in order to address these 'micro-demands' from customers. And for these kinds of offerings to be cost-effective for sellers, they need a huge technology component. It will help in reducing the costs of these services. Earlier sellers had to just make a product, and someone would buy it. Now, a producer needs to customise the product and make it cost effective as well. Else, the product will have no takers.

Imagine making only a US$ 1 payment on your credit card. Or a Rs 45 payment. Using a typical payment instrument such as a credit card for such purchases is difficult. The transaction fees you would be paying to Visa or MasterCard would be more than the value of your purchase. There is a huge opportunity to facilitate these kinds of micro payments. Technology needs to be enabled in order to support a huge volume of such kinds of low-value transactions.

These kinds of transactions usher in an 'inclusive commerce'. This helps bring everyone into the buying circle. From earlier being a privilege of the rich, now anyone can afford a cellphone. Right from a roadside vegetable vendor to top executives, everyone uses a mobile device. The only difference being that the vendor will be using a prepaid option, with small recharge options (as low as Rs 10). The executive will be paying bills running into thousands of rupees every month.

The World Bank estimates that there are over 150 m poor households in India. This works out to over 800 m people living either below the poverty line (living on less than US$ 1.25 per day on purchasing power parity (PPP) basis). Or they are living in moderate poverty (on less than US$ 2 per day-PPP). This is living on somewhere between Rs 60 - Rs 100 per day. We definitely need new ways to improve the lot of these poor people. And inclusive commerce and cost reducing technology seems to be the best way forward.


Equitymaster requests your view! Post a comment on "New Commerce: Everything is going nano". Click here!

  

More Views on News

TCS Share Price Down by 5%; BSE IT Index Down 3.4% (Market Updates)

Sep 24, 2020 | Updated on Sep 24, 2020

TCS share price is trading down by 5% and its current market price is Rs 2,450. The BSE IT is down by 3.4%. The top gainers in the BSE IT Index is ECLERX SERVICES (up 1.5%). The top losers is TCS (down 5.2%)..

MPHASIS Share Price Down by 5%; BSE IT Index Down 2.2% (Market Updates)

Sep 24, 2020 | Updated on Sep 24, 2020

MPHASIS share price is trading down by 5% and its current market price is Rs 1,377. The BSE IT is down by 2.2%. The top gainers in the BSE IT Index is ECLERX SERVICES (up 1.2%). The top losers is MPHASIS (down 5.2%)..

The BSE IT Index Down 2% ; RAMCO SYSTEMS Among Top Losers (Market Updates)

Sep 24, 2020 | Updated on Sep 24, 2020

The BSE IT Index Down at 19,804 (down 2.1%). Among the top losers in the BSE IT Index today are RAMCO SYSTEMS, DATAMATICS GLOBAL and HOV SERVICES. Meanwhile, the BSE Sensex has plunged 1.5% to 37,304.

QUESS CORP. LTD Share Price Down by 6%; BSE IT Index Down 1.4% (Market Updates)

Sep 24, 2020 | Updated on Sep 24, 2020

QUESS CORP. LTD share price is trading down by 6% and its current market price is Rs 373. The BSE IT is down by 1.4%. The top gainers in the BSE IT Index is MINDTREE (up 0.5%). The top losers is QUESS CORP. LTD (down 6.0%)..

More Views on News

Most Popular

How the 8-Year Cycle Can Help Identify Multibaggers (Fast Profits Daily)

Sep 11, 2020

This is how you can apply the greed and fear cycle in the market to pick stocks.

Why We Picked This Small-cap Stock for Our Hidden Treasure Subscribers (Profit Hunter)

Sep 17, 2020

This leading household brand will profit big time in a post covid world.

This Could Be the Best September for Auto Stocks (Profit Hunter)

Sep 11, 2020

Here's why I think this month could be a great for auto stocks.

What Do the Charts Say About Buying Smallcaps Now? (Fast Profits Daily)

Sep 18, 2020

Everyone seems to be excited about buying smallcaps now...but is it the right thing to do? What do the charts tell us? Find out in this video...

More

Covid-19 Proof
Multibagger Stocks

Covid19 Proof Multibaggers
Get this special report, authored by Equitymaster's top analysts now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE IT


Sep 24, 2020 (Close)

COMPARE COMPANY

MARKET STATS